The digital sphere has become an indispensable part of the American economy, and nearly every modern business is online in some way, shape or form. However, as you compile digital information, you have to realize the sensitivity of the information in your care. It might not only include company information, but also customer and other third-party data. Were any of this data to become lost, stolen or compromised, then a lot of people could suffer significant challenges.
Your business must be able to respond to data security incidents efficiently, and without a significant financial loss itself. At this time, a specific benefit known as cyber liability insurance will be there to help you out.
Let’s take a closer look at this benefit, and why it’s essential that every business that has a digital footprint should invest in this coverage. It will cover numerous costs that are likely to beckon following issues within your network.
What’s Cyber Liability Insurance
If you use computer data in any form in your business—and let's face it, most of us do—then cyber liability insurance is a benefit for you. It’s an essential piece of commercial liability benefits that are designed specifically to assist you in the event that you experience data loss, theft or destruction that could harm both your operations and your customers.
On your computer networks, you might store sensitive information like customer contact information, birth dates, financial information, medical records, social security numbers and other highly private statistics. Should a massive data breach, cyber-attack or other system failure expose or compromise that data, then those whose information you held could face the risk of identity theft, monetary loss and other embarrassments.
What’s worse, those affected by the loss might blame your business for their problems, and they might demand compensation as a result. It’s at this point that cyber liability insurance can step in to assist those affected. It will ensure that:
- Your business can respond to data security incidents in ways that minimize their effect on all involved parties. The policy will help cover many essential recovery services so that you don’t have to bear the cost of them out of your own pockets.
- Because these incidents might involve third parties, you can use cyber liability policies to compensate them for their losses. You will provide them with the resources they need to protect themselves.
Let's take a closer look at some of the policy services within a cyber liability plan.
Benefits Included in Cyber Liability Insurance
There are numerous costs that might arise from data breaches, which is why cyber liability coverage is designed to cover many different cost burdens. These might include:
Notification Costs
If sensitive customer information were to be stolen from your company networks, you are required by law (in most instances) to notify customers of the issue. Depending on your company’s structure, you might also have to notify certain government entities. Your cyber liability plan will ensure that any costs incurred by making these notifications are paid for.
Customer Identity Protection
Most data breach issues immediately raise concerns about identity theft for those impacted. However, cyber liability insurance policies will offer you the option to provide identity protection services, such as credit monitoring and social security number tracking, to ensure that they never have to worry about someone using their information dishonestly.
Data Recovery
You will naturally want to see if it is possible to recover destroyed or compromised data. After all, if you can get the information back, then your losses might be much lower than they would be if the data was a total loss. This benefit can help you do so, while still re-securing your system for the future.
Extortion Reparations
Cyber thieves might not just steal information, but also might demand compensation (I.e. a ransom) in an attempt to extort money from you. Under a ransomware attack, you might have to consider whether you will have to pay this money in order to recover data. You can receive compensation to allow you to cover these expenses.
Loss of Income
At times, cyber security incidents will interrupt your ordinary operations, and you might be forced to pause your work in order to minimize your losses. If you suffer a loss of income during this period, then your policy can often pay to help you recover the costs.
Legal Assistance
When third parties (I.e. clients) are involved in cyber security incidents, they might hold your business responsible for the losses they sustained. If they were to take legal action against you, then your own legal fees might skyrocket. However, cyber liability insurance can provide you with the compensation necessary to cover these costs.
Various other types of protection might come as part of your company’s cyber liability insurance. Therefore, work closely with your insurance agent to determine the right way to insure yourself in the most expansive way possible.