Cyber Liability insurance covers your business’ liability for a data breach that includes sensitive customer information. This could include things like Social Security numbers, credit card numbers, account numbers, driver’s license numbers and even medical records.
Why doesn’t my general liability insurance cover cyber liability?
GLI covers bodily injuries and damage to property which is a result of your products, services or operations. Be sure to check your policy because cyber insurance is usually not included in your general liability policy.
There are all kinds of terms to describe the same exposure including Cyber Liability, Privacy Liability, Security & Privacy liability, Data Breach, Network Security, and Cyber Security Insurance to name a few.
All of these names focus on your exposure to a data breach. A data breach can occur when personally identifiable information is compromised by hackers, a faulty transaction, malfunctioning technology, simple human error and even lost or improperly disposed data.
The effect of a data breach on your small business could be devastating.
You will have to pay to notify the affected individuals as well as the potential expenses arising from credit monitoring, identity theft resolution, analysis into how the data breach occurred and any steps needed to avoid another occurrence.
These costs can be heavy and time consuming to identify. Security and Privacy Liability Insurance, also known as Cyber liability protects businesses in the event of a costly data breach.
Why Have Cyber Liability Insurance?
You will be hacked, it is not a matter of if, but when. Data breaches occur every day. While hacking incidents are the most recognizable and expensive cause of data loss, they are not the most common. It’s a startling fact – simple human error accounts for three out of four incidents.
40% of the data breach cases are from people making mistakes, such as losing laptops and flash drives.
36% are system glitches, such as software updates, which inadvertently expose sensitive private files.
24% are malicious and criminal attacks.
No matter the sophistication of the security system, there is little that can be done to eliminate the risk of human error. A common, accidental breach is a real business risk worth considering today.
What are the Costs Associated With Data Breach Exposure?
Claims for failure to protect information, expense of legally required notifications and credit monitoring to those whose information is exposed, forensic expense to find out and resolve what happened, public relations expense to maintain business reputation, regulatory and payment card industry fines and hacker extortion demands.
Small business owners have gone out of business due to identity thieves impersonating their business and personal name leading to loan defaults, inability to access credit and loss of business reputation.
Why You Need Cyber Liability
Federal government regulations such as HIPAA, HITECH, and Gramm-Leach as well as forty-seven individual states have all created legislation protecting personal information of individuals. These laws outline a business’ responsibilities after a breach, regulatory requirements not to mention the possibility of lawsuits.
The average cost per record to a business from a data breach is $194.
Businesses that accept credit cards or debit cards may be subject to fines and penalties for violations of the Payment Card Industries Data Security Standards (PCI DSS).
Claims arising from activity on your website are likely not covered under your General Liability if it concerns intellectual property or activity in a chat room or bulletin board, including social media.
The Federal Trade Commission estimates that the average time spent resolving a single identity theft is 400 hours. A business owner or partner or board member cannot properly manage their business while resolving an identity theft.
If the personal credit of a business owner is ruined from an identity theft, that owner may lose the ability to access loans essential to the operation of that business.
What does cyber insurance cover?
Legal fees and expenses as well as:
Restoring personal identities of affected customers
Notifying customers about a data breach
Repairing damaged computer systems
Recovering compromised data
What to look for as a cyber insurance buyer
Many well-known insurance companies offer cyber insurance policies. We work with the top carriers in the country to be sure your needs are met.
Like any business insurance, cyber insurance coverage varies by insurer and policy.
When shopping around and comparing policies among insurers, here are some things to look for and ask about:
What are the deductibles? Be sure to compare deductibles closely among insurers, just like you do with health, vehicle and facility policies.
Does the insurance company offer one or more types of cyber insurance policies or is the coverage simply an extension to an existing policy? In most cases, a stand-alone policy is best and more comprehensive. Also find out if the policy is customizable to an organization.
How does coverage and limits apply to both first and third parties? For example, does the policy cover third-party service providers? On that note, find out if your service providers have cyber insurance and how it affects your agreement.
Does the policy cover any attack to which an organization falls victim or only targeted attacks against that organization in particular?
Does the policy cover non-malicious actions taken by an employee? This is part of the E&O coverage that applies to cyber insurance as well.
Does the policy cover social engineering as well as network attacks? Social engineering plays a role in all kinds of attacks, including phishing, spear phishing and advanced persistent threats (APTs).
Because APTs take place over time, which can be months to years, does the policy include time frames within which coverage applies?
The WHINS Insurance Agency Advantage
Our Security and Privacy product provides insurance coverage for any third party liability and first party expenses arising from a breach of private/confidential information.
WHINS Insurance Agency can quote most cyber risks in 48 hours
Minimum premiums starts at $1,000 for a $1Mil limit for companies with under $1Mil in revenues.
Coverage May Include
Third party liability for financial loss, mental anguish, mental distress and any breach related claims
First party coverage for breach related expenses
Full limit coverage for notification, credit monitoring and computer forensic expense
Coverage for breach costs available outside of the policy limit
Coverage available for business interruption, lost income and restoration of data post breach
Breach of contract coverage
PCI fines, penalties and remediation expenses
Regulatory coverage for all state, federal, foreign, and privacy related regulations (PCI, HIPAA, EU, etc.)
Primary limits available up to 20 million (higher limits available through excess)
Retentions starting at $1,000
Coverage can be combined with E&O
In-house quoting system for risks up to $100 million
Coverage to indemnify third party vendors or clients for breach expenses
Notification costs are covered when required by law and on a voluntary basis
Free risk management services provided to policyholders
How to get Cyber Liability Insurance?
The bottom line is, every business needs Cyber Liability. At WHINS, we’re serious about protecting your business and we’re here, ready to help with your Cyber Liability needs!
Call or visit our quotes page today to get started in minutes.