Cyber Liability Insurance

As many modern workplaces have become increasingly dependent on technology and digital solutions, organizations must avoid becoming complacent about subsequent risks and exposures. While implementing various software, programs and applications may help companies pursue innovation and streamline operations, they may also create new cyber exposures or exacerbate existing risks. With this in mind, cyber liability insurance emerges as an integral component of most businesses’ loss control measures.

How Does Cyber Liability Insurance Work?

Cyber liability insurance, also known as cyber insurance and cyber security insurance, can cast a multifaceted financial safety net across many risks and exposures related to cyber incidents, including data breaches and cyberattacks. Suppose a business experiences a cyber incident, such as a denial-of-service attack, malware infection, phishing scam or social engineering. In that case, an adequate cyber liability insurance policy can play a crucial role in limiting out-of-pocket losses and helping operations resume in a timely manner.

Like many insurance products, cyber liability insurance establishes a legal agreement between a policyholder and carrier. Regular premiums retain companies the right to file a claim following covered cyber incidents. If approved, insurance companies agree to provide financial assistance to limit fiscal losses that might otherwise prove catastrophic.

What Does Cyber Liability Insurance Cover?

While cyber liability insurance policies may often be customized to suit a company’s needs, preferences, budget and risk tolerance, coverage can typically include financial protection from the following losses or expenses:

• Notification costs—This part of cyber liability insurance may help pay for expenses related to notifying affected parties, such as customers or clients whose sensitive information may have been compromised.
• Fees for additional help—If a cyber incident requires a policyholder to enlist the assistance of other professionals, such as IT contractors, digital forensics investigators or public relations firms, their insurance may help cover costs.
• Business interruption losses—In many cases, a cyber incident may disrupt a company’s normal operations. This component of cyber liability insurance may help policyholders recoup lost income, as well as pay for expenses related to restoring compromised systems or acquiring new equipment.
• Cyberextortion payments—Cybercriminals may use ransomware attacks to hold data and systems hostage, or even threaten to release sensitive data to the public. Fortunately, cyber liability insurance may help companies meet the perpetrators’ demands.
• Legal expenses—A cyber incident may lead to fines from regulatory agencies and lawsuits. In response, cyber liability insurance may help limit out-of-pocket losses, including by helping to pay for attorney fees, settlements and court-ordered judgments.

We’re Here to Help

At J.A. Faccibene & Associates Insurance Services, our experienced team is committed to helping businesses secure appropriate cyber liability coverage. Visit our website or call 800-937-5515 to learn more or to get a customized cyber liability insurance quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.