Cyber Liability Insurance
Cyber Liability Insurance Information
Technology has become ingrained in most modern workplaces. Various applications, programs, software and other advancements have become attractive ways for organizations to optimize daily operations and pursue new innovations. However, businesses must also understand that implementing more technology in the workplace may increase their cyber risks and exposures. With this in mind, businesses should consider adequate cyber liability insurance.
Why Is Cyber Liability Insurance Important?
As modern workplaces have become more dependent on technology, many cybercriminals have increased their activity. In addition to an increasing frequency of attacks in recent years, many perpetrators have expanded their target selection to include more small- and medium-sized organizations. Furthermore, cyberattack methods continue to evolve. Phishing scams, malware infections, ransomware extortion and denial-of-service attacks are all parts of cyber criminals’ expanding arsenal. Without cyber liability insurance, even a single ill-advised click or misjudgment by an employee could incur catastrophic out-of-pocket costs and jeopardize a business’s future.
What Is Cyber Liability Insurance and What Does It Cover?
Cyber liability insurance is an essential loss control measure for any organization that relies on technology or manages sensitive data. These policies can provide critical financial assistance following data breaches or other cyber incidents which might otherwise result in significant out-of-pocket financial losses.
Fortunately, adequate cyber liability insurance can insulate policyholders from financial losses and limit out-of-pocket costs. In the wake of a cyber incident, cyber liability insurance can generally help pay for the following:
- Response costs—This may include investigating the incident or notifying affected parties.
- Monitoring services—If the sensitive data of clients or other third parties was exposed, this coverage can help pay for credit and fraud monitoring services.
- Incident management—Policies may help pay for IT contractors, crisis management teams or public relations firms.
- Lost income—This coverage can help a policyholder recoup lost or reduced income if their operations were delayed or disrupted by a cyber incident.
- Cyber extortion—If a cybercriminal holds an organization’s systems hostage or threatens to release sensitive data, cyber liability insurance may help pay them off.
- Fines and legal costs—This may include noncompliance fines issued by regulatory bodies or expenses arising from lawsuits, such as representation, settlements and judgments.
Who Needs Cyber Liability Insurance?
The need for cyber liability insurance transcends industry lines. Furthermore, small- and medium-sized organizations should not assume they will not be targeted by cybercriminals. In short, any business that relies on technology or transmits, stores or otherwise manages sensitive data, such as health records, banking information and credit card numbers, should prioritize cyber liability insurance.
When Is Cyber Liability Insurance Required?
Cyber liability insurance is generally not required by law, although organizations may be subject to certain mandates depending on their unique circumstances. For example, business contracts with government agencies or large corporations may require parties to carry various types of insurance, including cyber liability. Regulations also require companies to notify customers of a data breach involving their personal information, potentially making cyber liability insurance a necessary resource to avoid noncompliance fines.
Get the Right Coverage
At Wilber-Price Insurance Group, our dedicated staff is well-equipped to help businesses, individuals and families establish financial security through optimal coverage solutions. We will work with you to assess your cyber liability insurance needs and assemble a suitable policy. Contact us today to get started.