So often, when a company approaches us about business insurance, they think about physical risks. However, cyber liability insurance is one type of insurance that’s often overlooked but is increasingly important in today’s digital world. Here’s why.
What is Cyber Liability Insurance?
Cyber liability insurance is ideal for established organizations prone to cyber-attacks or tech-related risks. These risks include privacy investigations and any lawsuits related to attacks on the database.
If your organization is a victim of a cyber-attack, having cyber liability insurance in place can help cover you from:
- Legal fees related to meeting state and federal regulations
- Notification expenses associated with alerting your customers of a data breach
- Ransom fees to unlock your data after a ransomware attack
- Lost revenue due to an outage
- Lawsuits relating to the security and privacy of your employee and customer’s data
- Regulatory fines from state and federal agencies.
How Much Does Cyber Liability Insurance Cost?
Cyber liability insurance costs vary depending on your risk levels like any other business insurance. When quoting your coverage, insurance companies will look at a variety of factors, including:
- Company size
- Number of clients, customers, or patients
- Revenue history
- Claims history
Each of these areas will influence your cost. For example, if you have more sensitive data, you may require more protection, so naturally, the cost would be higher than if you did not have a lot of data.
Why Do Businesses Need Cyber Liability Insurance?
Your organization holds a wealth of data. From the personal information you collect from your clients or customers to your financial information relating to your customer’s preferred payment methods, your organization is an ideal target for thieves.
Cyber liability insurance allows you to respond faster and with more backing than if you were to go it alone. If you’re still unsure of whether this type of coverage is right for your organization, consider these three things:
- How you collect, store, and send personal information about your customers and employees
- The sensitive nature of information you deal with in your industry includes health, education, and financial data
- Your response plan to a cyberattack
Knowing the details around these three core areas can help you know whether this coverage is right for you. In general, if you collect, store, or send personal information, work in an industry where personal information is extra sensitive, or don’t have a plan for a cyberattack, cyber liability insurance is a good idea.
What’s Not Covered by Cyber Liability Insurance?
Cyber liability insurance is only one type of business coverage. It does not cover every type of claim filed by your company. In addition to cyber liability insurance, you will also want to be sure you carry:
- General liability insurance for claims associated with bodily injury and property damage
- Commercial property insurance to protect your equipment
- Employment practices liability insurance to protect against claims associated with harassment, discrimination, or wrongful termination
- Professional liability insurance to cover errors and omissions from professional services rendered
There’s a lot to consider when insuring your business. Talking to a knowledgeable insurance agent can help you sift through all the information and find a policy that’s right for your organization’s needs. We can help. Contact McGrath Insurance Group to request a proposal and review what you need for cyber liability insurance.