Cyber liability insurance is essential for any business that stores information on a network. And in today’s digital age, that would include practically all businesses, both large and small. At one time, this type of insurance policy was only used by companies involved in the technology industry, such as those that offered network security. Today, cyber liability insurance (CLI) policies can help a much broader range of companies, from online retail stores to large financial corporations and everything in between. This type of insurance can help protect businesses from security breaches and keep their customers’ personal information safe if there is ever a threat to their network.
Important Facts All Business Owners Should Know about Cyber Liability Insurance
Cyber liability insurance is designed for the modern digital age that we live in. It can provide protection for the new online risks that business owners face each day. There are also some policies that may help in areas outside of the internet and networking such as with brand reputation. Any company that deals with sensitive client information and stores these details on their hard drives should consider taking out a good cyber liability insurance policy.
Cyber Liability Insurance Is for Businesses of Any Size
Cyber liability insurance can be just as useful for that small business down the street as it is for that large corporation located downtown. The policy can be tailored to meet the specific needs of each company and may include one or more of the following types of insurance coverage:
- privacy penalties
- cyber terrorism
- protection of network assets
- security and privacy liability
- security breach response costs
- audit or regulatory claim expenses
Your Business Insurance Policy May Not Provide Adequate Coverage for Cyber Threats
While you may already have a general liability insurance policy for your business, you should be aware that most of these policies designed for businesses do not provide coverage for any type of cyber-related risks or exposures. Although there are some business insurance plans that have limited cyber liability coverage, they will not offer the same level of coverage that you would receive from an actual cyber liability insurance plan.
The Type of Businesses That Should Have Cyber Liability Insurance Coverage
Any business that conducts transactions online involving sensitive data such as credit card numbers, bank account information, social security numbers, addresses, and other important data should have some sort of cyber liability insurance in place. At one time, the type of businesses who needed CLI policies was limited. However, today it is hard to find a business that couldn’t benefit from this type of policy.
Your Company Is Responsible for Protecting Your Client’s Sensitive Information
If you store information about your clients or customers on your network, you have a legal responsibility to them to ensure that their personal details are always kept safe. This also includes information about your employees that may be stored on your company network. There are third-party businesses that can provide protection against threats to your company’s sensitive information. However, you can still be held liable for a security breach in your network even if you have hired one of these companies.
Cyber Liability Insurance Coverage Can Help with Downtime for Your Business Due to a Virus
If your company experiences a virus that causes a complete wipe of your system leaving you with nothing to work with afterwards, you will need insurance coverage to help you recover from this severe type of damage. A good CLI policy can also provide protection if your company accidentally sends a virus to a customer or a business partner.
CLI Policies Can Protect against Exposure to Sensitive Material
If you store customer credit card information on your servers for automatic payments, your company needs to have access to some type of cyber liability insurance plan. Storing this type of sensitive information on your network can create exposure and puts the data at a high risk of being lost or stolen. Any company that accepts payment by credit card online is at risk of a potential cyber threat in the future.
Storing Information on a Portable Device Can Also Put Your Company at Risk
If you store vital information on a laptop, external hard drive, or any other type of portable device, you are putting your company, your clients or customers, and your employees at a high risk of having their identities stolen. And if that wasn’t bad enough, your company will also be held liable for these thefts if they occur. It is your responsibility to store your customer and employee information securely. If you are unsure about the level of security that you have for this information, you should think about taking out a cyber liability insurance policy as soon as possible.
Keep in mind that every cyber liability insurance plan is different, so you will need to find out what type of coverage you are paying for and if you require any additional coverage to keep your business safe. Even if you have hired a third-party company to protect your network and sensitive data, you could still be held liable for any type of security breach that occurs within your company or with the third-party company. That is why it is so important for all businesses to purchase a cyber liability insurance plan today! This will help to guarantee that you have the coverage needed to take care of any risks or threats that may be on the horizon.
This article was published in the Spring 2019 issue of the General Insurance Services Risk & Business Magazine. Access the full publication here