Cyber Liability Insurance

What Is Cyber Insurance?

Cyber insurance liability refers to the financial protection provided by an insurance policy for a business or individual in the event of a cyberattack or data breach that results in financial losses, legal expenses, and other related costs. This type of insurance typically covers costs such as legal fees, data recovery expenses, and loss of income resulting from a cyber incident.

The scope of coverage can vary based on the policy and the policyholder's specific needs. It does not matter if your business will have a security breach, but when.

What does Cyber Liability Insurance cover?

Cyber liability insurance typically covers the costs and damages associated with a cyberattack or data breach. The specific coverage can vary depending on the policy, but some common areas of coverage include the following:

• Data breaches: This covers the cost of investigating and notifying individuals affected by a data breach and legal fees and settlements resulting from lawsuits.
• Business interruption: This covers loss of income resulting from a cyber incident that disrupts normal business operations.
• Cyber extortion: This covers the costs of responding to a cyber extortion threat, such as ransomware.
• Data loss or damage: This covers the costs of restoring or recovering lost or damaged data.
• Cyber liability: This covers costs associated with lawsuits resulting from a cyber incident, including legal fees and settlements.
• Crisis management: This covers the cost of hiring public relations or crisis management firms to mitigate the damage to a business's reputation.

Reviewing the policy carefully to understand the specific coverage and any exclusions or limitations is essential.

Why do Businesses Need Cyber Liability Insurance?

Cyber attacks happen more than you’d imagine. Small businesses are the target of 43% of cyber attacks, but only 14% are ready to protect their business if there is a problem. More than two-thirds (67%) of companies with less than 1,000 employees have been the target of a cyber attack, and 58% have compromised their security. After being hit by a cyber attack, many of these businesses never opened again.

The average cost of a cyberattack to a company is $200,000. Personally Identifiable Information (PII) was the most common type of data breach reported, and credit and debit card information was one of the most common types of stolen data. Companies can keep running after an attack if they have cyber liability insurance.

Cyber liability insurance is essential for any business, whether big or small. At the very least, cyber liability insurance helps businesses follow state laws that say they have to tell customers when their personal information has been stolen.

Cybercriminals often find it easy to attack small businesses because they usually have less security than larger businesses.

A cyber liability insurance policy helps a business get back on its feet after it has been attacked online. It will give you access to expert resources and financial help during a data breach event's investigation, notification, recovery, and activities after recovery.

Who needs Cyber Insurance?

Any business that handles sensitive data or uses technology in its operations should consider getting cyber insurance. This includes businesses of all sizes, from small startups to large corporations. Here are a few examples of businesses that may benefit from cyber insurance:

• Healthcare organizations are subject to strict data protection regulations and face a high risk of cyber threats due to the sensitive personal and medical information they handle.
• Banks, credit unions, and other financial institutions handle sensitive financial information, making them attractive targets for cybercriminals.
• Retail businesses collect and store any personal information from their customers, including credit card information, making them vulnerable to data breaches.
• Businesses that provide professional services, such as law firms or accounting firms, may be responsible for handling sensitive client information and may be held liable if that information is compromised.
• Technology companies that develop or sell software, apps, or other technology products are at risk of cyber threats and may face claims of intellectual property infringement.

However, it's not just businesses that need cyber insurance. Depending on their specific needs and risks, nonprofit organizations, government agencies, and individuals may also benefit from cyber insurance coverage.

Bottomline 

Cyber risk affects every business that uses technology, from large corporations to small mom-and-pop shops. Threats to businesses increase as technology gets more complicated and advanced.

Every business and organization must have cyber liability insurance and a good cyber security plan to manage and reduce cyber risk.

At Way.com, we know how complex cyber threats are to deal with. We can help you find ways to insure and protect the assets of your business.