CYBER LIABILITY INSURANCE
ALL YOU NEED
TO KNOW ABOUT
CYBER
LIABILITY
INSURANCE
BY: RYAN CAIN
C
yber liability insurance is
essential for any business
that stores information on
a network. And in today’s
digital age, that would include
practically all businesses, both large and
small. At one time, this type of insurance
policy was only used by companies
involved in the technology industry, such
as those that offered network security.
Today, cyber liability insurance (CLI)
policies can help a much broader range
of companies, from online retail stores
to large financial corporations and
everything in between. This type of
insurance can help protect businesses
from security breaches and keep their
customers’ personal information safe if
there is ever a threat to their network.
IMPORTANT FACTS ALL BUSINESS
OWNERS SHOULD KNOW ABOUT CYBER
LIABILITY INSURANCE
Cyber liability insurance is designed for
the modern digital age. It can provide
protection for the new online risks that
business owners face. There are also some
policies that may help in areas outside of
the internet and networking such as with
brand reputation. Any company that deals
with sensitive client information and
stores these details on their hard drives
should consider taking out a good cyber
liability insurance policy.
CYBER LIABILITY INSURANCE IS FOR
BUSINESSES OF ANY SIZE
Cyber liability insurance can be just as
useful for that small business down the
street as it is for that large corporation
located downtown. The policy can be
tailored to meet the specific needs of each
company and may include one or more of
the following types of insurance coverage:
• privacy penalties
• cyber terrorism
• extortion
• protection of network assets
• security and privacy liability
• security breach response costs
• audit or regulatory claim expenses
YOUR BUSINESS INSURANCE POLICY
MAY NOT PROVIDE ADEQUATE
COVERAGE FOR CYBER THREATS
While you may already have a general
liability insurance policy for your business,
you should be aware that most of these
policies designed for businesses do not
provide coverage for any type of cyber-
related risks or exposures. Although there
are some business insurance plans that
have limited cyber liability coverage, they
will not offer the same level of coverage
that you would receive from an actual
cyber liability insurance plan.
THE TYPE OF BUSINESSES THAT
SHOULD HAVE CYBER LIABILITY
INSURANCE COVERAGE
Any business that conducts transactions
online involving sensitive data such
as credit card numbers, bank account
information, social insurance numbers,
addresses, and other important data
should have some sort of cyber liability
insurance in place. At one time, the type
of businesses who needed CLI policies was
limited. However, today it is hard to find
a business that couldn’t benefit from this
type of policy.
YOUR COMPANY IS RESPONSIBLE FOR
PROTECTING YOUR CLIENTS’ SENSITIVE
INFORMATION
If you store information about your clients
or customers on your network, you have a
legal responsibility to them to ensure that
their personal details are always kept safe.
This also includes information about your
employees that may be stored on your
company network. There are third-party
businesses that can provide protection
against threats to your company’s
sensitive information. However, you can
still be held liable for a security breach in
your network even if you have hired one of
these companies.
CYBER LIABILITY INSURANCE COVERAGE
CAN HELP WITH DOWNTIME FOR YOUR
BUSINESS DUE TO A VIRUS
If your company experiences a virus that
causes a complete wipe of your system
leaving you with nothing to work with, you
will need insurance coverage to help you
recover from this severe type of damage. A
good CLI policy can also provide protection
if your company accidentally sends a virus
to a customer or a business partner.
CLI POLICIES CAN PROTECT AGAINST
EXPOSURE TO SENSITIVE MATERIAL
If you store customer credit card
information on your servers for automatic
payments, your company needs to have
access to some type of cyber liability
insurance plan. Storing this type of sensitive
information on your network can create
exposure and puts the data at a high risk
of being lost or stolen. Any company that
accepts payment by credit card online is at
risk of a potential cyber threat.
STORING INFORMATION ON A PORTABLE
DEVICE CAN ALSO PUT YOUR COMPANY
AT RISK
If you store vital information on a laptop,
external hard drive, or any other type
of portable device, you are putting your
company, your clients or customers, and
your employees at a high risk of having
their identities stolen. And if that wasn’t
bad enough, your company will also be held
liable for these thefts if they occur. It is your
responsibility to store your customer and
employee information securely. If you are
unsure about the level of security that you
have for this information, you should think
about taking out a cyber liability insurance
policy as soon as possible.
Keep in mind that every cyber liability
insurance plan is different, so you will need
to find out what type of coverage you are
paying for and if you require any additional
coverage to keep your business safe. Even
if you have hired a third-party company
to protect your network and sensitive
data, you could still be held liable for any
type of security breach that occurs within
your company or with the third-party
company. That is why it is so important for
all businesses to purchase a cyber liability
insurance plan today! This will help to
guarantee that you have the coverage
needed to take care of any risks or threats
that may be on the horizon. +
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