Cyber Liability Insurance

As technology becomes increasingly important for successful business operations, the value of a strong cyber liability insurance policy will only continue to grow.

The continued rise in the amount of information stored and transferred electronically has resulted in a remarkable increase in the potential exposures facing businesses.

In an age where a stolen laptop or hacked account can instantly compromise the personal data of thousands of customers, or an ill-advised post on social media site can be read by  hundreds in a matter of minutes, protecting your business from cyber liability is just as some of the more traditional exposures businesses account for in their other insurance policies.

As technology becomes increasingly important for successful business operations, the value of a strong cyber liability insurance policy will only continue to grow. The continued rise in the amount of information stored and transferred electronically has resulted in a remarkable increase in the potential exposures facing businesses. In an age where a stolen laptop or hacked account can instantly compromise the personal data of thousands of customers, or an ill-advised post on social media site can be read by  hundreds in a matter of minutes, protecting your business from cyber liability is just as some of the more traditional exposures businesses account for in their other insurance policies.

Do you have plan to protect your business and your customers if you were to be attacked? Here are a few things that you can put in place immediately:

  • Know your data. A company cannot fully know how much is at risk until they understand the nature and amount of data they have.

  • Create an internal policy. All the employees should learn the importance of protecting the information they regularly handle to help reduce exposure to the business. In many cases, criminals will get inside a network due to one of your employees clicking on a line in an email or using a poor password.

  • Do background checks on employees. Background checking employees can help identify whether they have criminal pasts.

  • Update security software patches in a timely manner. Regularly maintaining security protections on your operating system is vital to them being effective over time.

  • Ensure systems have appropriate firewall and antivirus technology. After the appropriate software is in place, evaluate the security settings on software, browser and email programs.

  • Protect your business with insurance. Cyber insurance can cover the costs associated with data breaches.


What does Cyber Liability Insurance cover?

A traditional business liability policy is extremely unlikely to protect against most cyber exposures. Standard commercial policies are written to insure against injury or physical loss and will do little, if anything, to shield you from electronic damages and the associated costs they may incur. Awareness of the potential cyber liabilities your company faces is essential to managing risk through proper coverage.

Possible exposures covered by a typical cyber liability policy may include the following:

  • Data Breaches: Increased government regulations have placed more responsibility on companies to protect clients’ personal information. In the event of a breach, notification of the affected parties is now required by law. This will add to costs that will also include security fixes, identity theft protection for the affected and protection from possible legal action. While companies operating online are at a heightened risk, even companies that don’t transmit personal data over the internet, but still store it in electronic form, could be susceptible to breaches through data lost ot unauthorized employee access or hardware theft.

  • Intellectual property rights: Your company’s online presence, whether it be through a corporate website, blogs or social media, opens you up to some of the same exposures faced by publishers. This can include libel, copyright or trademark infringement and defamation, among other things.

  • Damages to a third-party system: If an email sent from your server has a virus that crashes the system of a customer, or the software your company distributes fails, resulting in a loss for a third party, you could be held liable for the damages.

  • System failure: A natural disaster, malicious activity or fire could all cause physical damages that could result in data or code loss. While the physical damages to your system hardware would be covered under your existing business liability policy, data or code loss due to the incident would not be.

  • Cyber extortion: Hackers can hijack websites, networks and stored data, denying access to you or your customers. They often demand money to restore your systems to working order. This can cause a temporary loss of revenue plus generate costs associated with paying the hacker’s demands or rebuilding if damage is done.

  • Business Interruption: If your primary business operations require the use of computer systems, a disaster that cripples your ability to transmit data could cause you, or a third party that depends on your services, to lose potential revenue. From a server failure to a data breach, such an incident can affect your day-to-day operations. Time and resources that normally would have gone elsewhere will need to be directed towards the problem, which could result in further loss. This is especially important as denial of service attacks by hackers have been on the rise. Such attacks block access to certain websites by either rerouting traffic to a different site or overloading an organizations server.

Cyber liability insurance is specifically designed to address the risks that come with using modern technology; risks that other types of business liability coverage simply won’t. The level of coverage your business needs is based on  your individual operations and can vary depending on your range of exposure. It is important to work with a broker that can identify your areas of risk so a policy can be tailored to fit your unique situation.

The Bunker, Your Coverage Guide

As reliance on technology continues to increase, new exposures continue to emerge. As your business grows, make sure your cyber liability coverage grows with it. The Bunker is here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk.

Cyber exposures aren’t going away and, in fact, continue to escalate.  Businesses need to be prepared in the event that a cyber attack strikes. To learn more about cyber liability insurance, contact us today.

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