Cyber Liability Insurance

The evolution of "cyber liability” over the past decade has motivated the major insurance carriers to design a product specific to this risk that contains 1st and 3rd party coverage. During this period of evolution, the industry has made a determination of what "cyber liability” is and what classes of businesses are most likely to be at risk. 

Although not every insurance company agrees on a specific definition, the coverages they provide can help us determine what "Cyber liability” is.

A business liability for data breach in which the company’s customers’ personal and sensitive information such as social security and credit card data, is exposed or stolen by a hacker or other criminal who has gained access to the company’s electronic network. The company’s exposure is not only the liability of the customer, but also the regulatory expenses that are mandated by the jurisdiction, and future losses resulting from identity theft. "Cyber liability” also presents 1st party exposure such as business interruption, data loss and destruction, computer fraud; funds transfer loss and cyber extortion.

Any business that is connected to the internet is at risk. Without question, preventative measures can be overcome by those who perpetrate cyber crimes which have been made evident by the recent data breach at the federal Office of Personnel Management.

Most major carrier packages offer 1st party coverage and 3rd party coverage. What used to be considered Technology Errors & Omissions coverage has evolved into a complete Cyber Liability Program which provides a package of coverages :

• Network and information security failure to prevent transmission of viruses or hacker penetration.
• Failure to protect confidential information.
• Committing libel, slander and other forms of disparagement with respect to the display of online material as well as copyright infringement by your website content.
• Regulatory penalties and actions by state or federal agency enforcement measures.

• Business Interruption due to breaches of a company’s network such as a denial of service attack.
• Ongoing expenses of retaining the services of a public relations firm to help mitigate damage to the company’s brand image and reputation.
• Investigation and settlement costs for threats made against the company related to intentional computer attacks.
• Breach response expenses such as notification costs, credit monitoring and identity and credit repair.

We understand that Cyber Liability is a fairly new risk that exists for any business connected to the internet and that the policies and coverages offered may be difficult to understand, and navigate. For this reason, your first best step is to contact us and speak with an experienced agent to get the information needed to make an informed decision.