Cyber Liability / Data BreachLearn More
CYBER LIABILITY INSURANCE
Data breach crimes are rising drastically nowadays. Protect your business by getting cyber liability insurance. This insurance is intended to shield business owners from various dangers related to conducting business online and storing sensitive information on a computer network or system.
This kind of loss is a risk for any company that manages a website, saves client data, or performs financial transactions on a computer or network. Suppose private data entrusted to you is lost or stolen. In that case, your company may incur significant expenditures for both investigating and fixing the breach, not to mention notifying any potentially affected customers.
While large companies tend to dominate the news when they experience a breach, these losses increasingly impact businesses of any size and industry. Over 60% of reported breaches involve small- and medium-sized organizations. Standard business insurance policies do not cover liabilities stemming from a breach of data security or privacy or damages to intangible property.
Cyber Liability Coverage
There is no standard form for a cyber liability insurance policy, but the majority of them cover one or more of the following:
- Data Privacy Liability: The insurance covers information on customers or employees that can be used to identify them personally.
- Network Security Liability: The insurance covers failure to prevent the spread of a virus or a harmful electronic attack.
- Media / Website Liability: It covers you for things like libel, slander, and intellectual property infringement in your online posts/website.
- Electronic Extortion: The insurance shields you from threats that would lock, delete, or release your data.
- Breach Response: It covers the costs associated with a breach-customer notification, credit monitoring, computer forensics, and legal expenses.
- Electronic Business Interruption: The insurance covers lost sales and downtime while a breach is resolved.
- Regulatory Penalties and Legal Defense Expenses: The coverage includes defense of lawsuits and fines/assessments levied by various agencies.
Common First-Party Costs Associated with a Data Breach:
- Legal Advice: This is associated with the cost of consulting an attorney or other expert to determine your regulatory and notification obligations.
- Notification Expenses: This involves clients, government, and regulatory entities as required by law.
- Credit Monitoring Services: Offering impacted consumers any kind of credit monitoring or identity theft protection is strongly advised.
- Business Interruption: This involves network and employee downtime related to an attack.
- Crisis Management: This involves enlisting the aid of a PR firm or consultant to help minimize harm to your brand’s reputation.
- Computer Forensics: This is associated with hiring an independent IT specialist to examine your system and discover the reason for the scope of a breach.
- Cyber Extortion: This involves the payment of an extortion demand based on the erasure, encoding, or disclosure of private information.
Common Third-Party Costs Associated with a Data Breach:
- Legal Defense Costs: This involves defending lawsuits brought against your company for failing to protect personal data.
- Settlements and Judgments: This includes payment of privacy liability-related out-of-court settlements and awards to third parties.
- Card Replacement Costs: This involves liability to a bank for the price of issuing new payment cards to affected people.
- Regulatory Fines and Penalties: This involves the Payment Card Industry (PCI) fines or penalties imposed by state and federal authorities.
- Electronic Media Liability: This covers the infringement of intellectual property, copyright / trademark infringement, libel, and slander in online communications.
- Network Security Liability: This covers failure to stop the spread of malicious code or computer viruses.