Cyber liability insurance, otherwise known as cyber risk insurance or cyber security insurance, protects small businesses from the high costs of a malicious software attack or a data breach. Cyber liability insurance covers expenses related to managing or remedying breaches, including public relations expenses, regulatory fines, customer notification, legal fees, and credit monitoring. It also helps small businesses recover after a data breach, covering costs that can include equipment damages, business disruption, forensic analysis, and revenue loss.
In this article, we delve deeper into cyber liability insurance. Read on to find out how it can benefit your small business.
What is Cyber Liability Insurance?
Cyber insurance coverage offers a broad spectrum of coverages to help protect businesses against damages caused by cyber threats to your data or computer system. These threats can result in the theft or misuse of sensitive data and lead to downtime or recovery costs, including legal fees and specialized repairs.
Many small business owners believe that cyber insurance is reserved for big companies. This is untrue. Hundreds of thousands of small businesses handle sensitive information, which, when exposed, can leave the business liable for numerous claims.
Any business that handles sensitive customer information such as credit card information is at risk. If a data breach happens to you, it could force your business to cough up hundreds of thousands of dollars. Cyber insurance covers these costs, helping you bounce back after a major setback.
Cyber liability insurance is essential for businesses, especially in this day and age where technology is at its prime and business is largely conducted online. Get business insurance at Thumann Agency. With us, you can get optimized coverage to meet the specific needs of your business.
What are the Main Types of Cyber Attacks?
The main types of cyberattacks include:
Cyber Extortion: In this type of attack, cybercriminals may hold your computer systems, website, or data hostage until you meet their payment demands.
Computer Attacks: Here, cybercriminals hack and compromise your computer.
Data Breaches: Breaches happen when crucial information such as credit card information is stolen.
Who Needs to Get a Cyber Insurance Policy?
Businesses that store or process sensitive information such as social security numbers, personal financial information, medical records, addresses, and names need cyber insurance. Also, third parties that handle confidential data, such as IT or accountant services, need cyber insurance. Many businesses that need cyber insurance include financial firms, real estate agents, marketing companies, and consultants.
Cyber risks can be the downfall of your business, which is why you need to get cyber insurance. At Thumann Agency, our cyber liability insurance has several coverages to help your company respond to a cyber attack. These coverages provide ways through which you can restore customer data or entire systems.
What Does Cyber Insurance Cover?
Cyber insurance covers various small business risks, which are classified into two categories:
First-Party Coverage: This coverage covers damages resulting from a data breach. It also protects your business from financial losses because of extortion, damage, or a damaged business reputation. These include data recovery, investigative services, and business interruption coverage.
Third-Party Coverage: This type of coverage covers damages if a cyberattack impacts your customers or business partners on your business. These damages can include customer notification, legal fees, or settlement costs.
How Much Does Cyber Liability Insurance Cost?
The cost of cyber insurance depends on your business’s exposure to cyber risk and your coverage needs. For instance, a high-risk business that needs $5 million in coverage should expect to pay more than a low-risk business that needs $500,000 in coverage. Other factors influencing your cyber insurance cost include claims history, data access, and network security.
What is the Difference between Cyber Liability Insurance and Data Breach Coverage?
While data breach and cyber liability insurance offer some of the same benefits, including response resources, Cyber liability insurance is the preferred option for big businesses that need added cyber protection. It helps big companies respond to cyber-attacks and recover from cyber damage.
On the other hand, data breach insurance helps businesses respond to a data breach if personally identifiable information or protected health information gets exposed. Suppose your small business is the victim of a data breach. In that case, data breach insurance pays to hire a public relations firm, notify affected customers, employees, or patients, and offer credit monitoring services to victims. Data breach insurance also allows businesses to add additional coverage, such as business income insurance, which helps businesses replace lost income if they can no longer operate because of a data breach.
Does Cyber Liability Insurance and Tech E&O Cover the Same Thing?
Cyber liability insurance covers costs from breaches within a business. On the other hand, Technology errors and omissions insurance covers damages caused by errors in your business’s products or services.
Does Cyber Insurance Cover Phishing?
Phishing is not covered under a cyber liability insurance policy; however, you can find coverage for phishing under Social Engineering because it is considered fraudulent instruction, impersonation, or deception.
What Are Some Ways that Cyber Insurance Provides Coverage?
Cyber security insurance provides coverage in the following ways: Notification Requirements — Notifying customers of a breach is mandated by law. Cyber coverage refers your business to a law firm that will help you reimburse the costs associated with the violation and post-breach responses. It also refers you to a breach vendor who will handle customer notifications when compromised personal information.
Lost Devices — Today’s workforce is mobile, meaning laptops, tablets, and other mobile devices are often leaving the workplace. They may be stolen or tampered with, and private information exposed. Cyber insurance helps cover claims related to a breach after employee devices were stolen.
Contact the Experts at Thumann Insurance Agency Today!
If you are looking to get cyber liability insurance, look no further than Thumann Agency. Our cyber policy is designed for all businesses, protecting them against common cyber threats and new techniques used by cybercriminals to interrupt or steal data. Our cyber policy also covers reputational costs resulting from cyber attacks such as identity theft, damage, or loss of electronic data and protects businesses against cybercrime that affects computer systems.
No business is immune to the effects of cybercrime. Cyber liability insurance should be a top priority for your business. Our cyber liability insurance policies are tailored to meet your business’s specific needs; therefore, you can rest easy knowing that your business’s reputational and financial well-being will be protected should an attack happen.
Cyber exposures are not going away anytime soon. We are committed to providing coverage beyond general liability policies. Contact us at 972-991-9100 to get a quote.