Do you know if your insurance will cover you if your small business is the target of a DDoS attack? What if a phishing attempt ends up succeeding, and your business has funds siphoned off? If you are a business in the NEPA area, we want to help you. There are hundreds of cyber risks that a business faces every day, but if you know what your cyber coverage really includes, you can rest a little easier.
Once you know what your small business cyber liability coverage includes, your security and protection can be better focused. You can’t catch all dangers, but you can stop worrying about dangers that will be swiftly rectified. So, refine your organization’s defenses and read on for a brief overview of the most common areas that cyber liability insurance will cover.
Why Do You Need Cyber Liability Insurance?
Insurance is a constantly evolving industry, as it follows the damages and risks posed by the new ways we live our lives. Cyber insurance has had to quickly develop alongside an explosive technology industry. Standard business insurance simply cannot cover the range of damages that cyber attacks can cause.
Cyber insurance policies have not been around for long, so information about them can be difficult to parse. But without cyber liability coverage, your business risks large financial and legal losses without a safety net.
Cyber Liability Insurance Coverage: An Overview
You should not take this list as a comprehensive overview of what your policy will cover. Every policy is unique, and when you receive or update a policy, you should take the time to discuss and review potential use cases.
Data Loss, Recovery, and Re-creation
Whenever data is lost, there is the potential for lost income. Businesses rely on data and information more today than ever before. Cyber liability insurance can cover the cost of restoring a data loss from backups or more intensive means. Insurance might cover these costs, as well as related business interruption expenses.
Business Interruption and Loss of Revenue
You can lose valuable work hours if a cybersecurity or data breach occurs. When revenue is lost or your business activities are interrupted by an attack, your policy may cover this. Policies covering business interruption costs may include costs such as investigation, notifying affected customers, and credit monitoring services.
Computer Fraud
Computer fraud is typically performed via malware and other malicious programs. Some policies will include phishing or email/text impersonation, which are social engineering techniques that manipulate individuals into granting access to a system. Cyber liability insurance may cover losses from these attacks if funds are transferred based on fraudulent email or phone conversations. But a simpler answer to these attacks is proper cyber education.
Cyber Extortion Threats
Blackmail and extortion of all kinds are common fears on the internet, and cyber liability insurance coverage can help quiet these fears – especially alongside education on cybersecurity red flags. DDoS attacks, blackmail or extortion attempts, threats of manipulation or destruction, and ‘Doxxing’ (exposure of personal information) are all cyber threats and extortion. Policies may provide coverage, including ransom payments, negotiation costs, and legal fees.
Network Security Liability
When an organization’s network is poorly defended, it is left vulnerable to outside threats. Network security liability covers claims that result from unauthorized access to a system that results in financial losses for third parties.
Privacy Liability
If personally identifiable information (PII) or protected health information (PHI) is disclosed or misused by unauthorized actors, legal actions, regulatory fines, and settlements may be necessary to rectify the situation. Cyber liability insurance can cover claims related to this harm and may include legal defense costs or regulatory fines.
Multimedia Liability
Multimedia might be an unexpected area to cover in a policy, but unauthorized media use and IP infringement can result in major legal fines.
Don’t take this list as the only option for what your cyber liability insurance may cover. Policies can have many variations, even from the same company. Cyber liability coverage providers want to help ensure you have the protection you need but can only do so if they know the difficulties you might face. Discuss your risks and defenses closely with your IT support team when researching your policy options.
What Is Not Covered by Cyber Liability Coverage?
There are many reasons that a cyber risk insurance or liability insurance policy wouldn’t cover claims, as usual for insurance policies. One important example is that a policy will not be enacted if no breach has occurred, but your business is sued for potential vulnerabilities. Here are a few more examples of what is not covered under cyber liability insurance.
- Losses due to theft of intellectual property (IP insurance covers this!)
- If an agent of a foreign power causes the breach
- Cost of improving a system after an attack
- Certain social engineering attacks (Phishing, for example)
This last example is different from cyber fraud, which is covered. The difference here is that policies typically do not cover cases in which victims followed fraudulent instructions. This example is not considered a ‘computer system breach’ and usually requires specific extensions to your policy. That’s why it is so important to educate your teams on cybersecurity threats.
Additionally, many traditional and/or general insurance policies will not cover cyber security because they were designed before cyber attacks existed. These policies may cover some cyber attack exposures, but generally, they will not, and any coverage will be minimal at best.
Does Cyber Liability Insurance Have a Deductible?
Most insurance coverage policies have deductibles of some kind. A deductible is a fixed amount of money that you must pay toward the claim before an insurance policy begins to pay. This amount is intended to prevent fraudulent claims and ensure that everyone involved in the instance of cyber insurance coverage is invested in the situation.
Cyber liability insurance does have a deductible that you will have to pay. This deductible is applied each time your cyber insurance policy covers a loss. It is important to note that your premium and deductible have an inverse relationship—when one is high, the other is low—so consider your needs and risks carefully when committing to a particular deductible cost providing access to systems.
Small Business Owners Stay Protected with Cyber Liability Insurance
Now you know that your cyber liability coverage will not protect you from data breaches, but it will help pay for data recovery. Harmful cyber incidents can incur large legal costs and result in all affected parties losing out on productivity. A good cyber liability coverage plan will replace lost income and cover legal expenses—but you need to discuss all possibilities with your insurance provider.
A comprehensive protection plan from a professional IT support company can help mitigate or even prevent costly damages. But there is no way to 100% secure a system. People can be fooled, and technology can be broken. Call us at InnoTek today and discuss your options with a professional IT company that supports the local Pottstown, Scranton, and Williamsport communities. We will provide cybersecurity insurance insights and support your network’s protection.
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