What You Need to Know About Cyber Liability Insurance

Cyber crime is on the rise. In recent years, cyber criminals have increased their activity, expanded their target selection and evolved their attack methods. While smaller businesses may have previously flown under the radar of hackers, these organizations must now be aware of their potential presence in cyber criminals’ crosshairs.

As organizations of all sizes and across all sectors become more dependent on technology for daily operations, they could be exposed to cyber crimes. A robust cyber liability insurance policy is essential.

How Does Cyber Liability Insurance Work?

As its name suggests, cyber liability insurance provides policyholders with coverage for losses and damages arising from data breaches and other cyber incidents. Although the details of policies may vary, this type of insurance can generally help pay for the following:

• Response costs—These may include notifying parties affected by the incident, such as customers whose data has been compromised. This coverage may also help cover costs related to investigating the incident.
• Hiring help—The services of IT contractors, digital forensics experts, fraud and credit monitoring services and public relations teams may be needed to assist in managing the aftermath of an incident.
• Cyber extortion payments—These costs may need to be paid after a ransomware attack.
• Repair or replacement costs—Businesses may have to pay for repairing or replacing devices or data that have been lost, damaged or compromised.
• Business interruption costs—These may include the difference between an organization’s typical income and the reduced amount generated due to an interruption of operations after a cyber incident.
• Legal expenses—These may include regulatory fines and costs arising from lawsuits, such as representation, judgments and settlements.

Why Do Small Businesses Need Cyber Liability Insurance?

Phishing scams, malware, denial-of-service attacks and even physical theft or misplacement of devices can all have devastating consequences for an organization. Many small businesses may lack the financial resources to absorb and recover from a cyber incident. Even a single lapse in judgment by one employee could jeopardize your organization’s finances and future.

How Much Does Cyber Liability Insurance Cost?

Like most types of coverage, insurers must comprehensively analyze a small business’s circumstances before providing an accurate quote for sufficient protection. In most cases, this process may include consideration of the following criteria:

• Industry
• Type and amount of sensitive data handled
• Existing cyber security controls
• Workforce size
• Number of customers, clients or patients
• Annual revenue
• Claims history
• Policy details (e.g., coverage limits)

Acquire Optimal Coverage

With nearly 30 years of experience serving businesses in the Oakland area, Burns Employee Benefits Insurance Services LLC is well-equipped to help your organization protect itself with optimal cyber liability coverage. Our dedicated agents will work with you to understand your needs and craft an appropriate policy. Visit our website or call 510-652-7609 to get started today.

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.