The Need for Cyber Liability and Data Breach Insurance?
Cyber Liability Insurance can be a very difficult topic for many business owners to wrap their minds around. Many are looking for answers from their agent or their carrier, but it is often very misunderstood and solid answers can be hard to come by. This leaves many business owners asking questions like, “Am I really at-risk?” , “Doesn’t My General Liability Policy cover that?” or, “Do I really need Cyber Insurance?”
In short, most General Liability policies exclude Cyber or Data Related risks. Though some policies may include some “add-on” coverage that applies but, these typically do not have high enough limits or conditions and definitions that drastically limit coverage or exclude the coverage you really need.
A recent study by insurer Hiscox shows that “47% of small businesses has at least one cyber attack in the past 12 months and 44% of those has two to four attacks,” within the same period. As data breaches become more and more frequent, cyber liability insurance should be a top priority for every company, large and small. Furthermore, only 16% of businesses surveyed say they are confident in their cyber security readiness.
Some of the Most Frequently Targeted Industries in 2017 Include:
• Technology, Media & Telecom • Construction • Restaurants/ Bars
• Retail & Wholesalers • Accounting Firms • Doctors & Health Care
• Doctors & Health Care • Law Firms • Governmental Entities
• Manufacturing • Banking/ Financial Services • Utilities Providers
• Non-Profits • Travel & Leisure • Transportation
What Does Cyber Liability and Data Breach Insurance Cover?
First, it is important to remember that no two cyber policies are alike as carriers often have different coverages offered, definitions of terms, exclusions and various other conditions you need to pay attention to, when purchasing the right policy for your organization. Coverage in Cyber Liability policies can be broken down into First Party Coverages and Third Party Coverages.
First Party Coverages
First Party Coverages typically protect your company’s data and your employee’s data in the event of a breach. Some common First Party Coverags can include:
• Legal and Forensic Costs
• Crisis Management Costs
• Restoration of your data
• Costs associated with a Distributed Denial of Service (DDoS) Attack
• Loss of Business Income and Extra Expense and Contingent Business Interruption
• Payment of Cyber Extortion (Ransom) Demands
• Social Engineering Fraud or Loss Resulting from transfer of Funds via fraudulent email instructions
• Corporate Identity Theft
Third Party Coverages
Third Party Coverages provide limits of insurance to pay for the liability of data, of another entity, that is held by you. In other words, if you have any data on your network belonging to a vendor, a subcontractor, a client etc., these coverages will help you pay for claims as a result of the compromise of such data. Third Party Coverages can include:
• Errors of Omissions
• Costs of Notification of Effected Individuals
• Defense and Settlement Costs
• Consumer Class Action Lawsuits
• Credit Card Issuer Lawsuits
• Regulatory Investigation Expenses
• Lawsuits alleging Defamation or Slander via your Website or Social Media Content
• Transmission of Virus or Malware to another Third Party
• Claims against Directors and Officers alleging lack of oversight of cyber security
Want to see how prepared or unprepared you are?
Take this quick survey and we will help you determine if you and your business need to take a second look at your cyber protection
*Remember, this is just a brief questionnaire. It is always best to seek the advice of a licensed agent, especially one experienced with Cyber and Data Privacy Insurance, to help fully determine your possible risks
Interested in Learning More?
If you want to learn more about what we can do for you with our cyber liability insurance, fill out a form or give us a call today! With offices located in Montgomery and Birmingham, we are dedicated to finding the best solution for you and your company.