Most businesses use computers in some shape or form these days. Yours might be no exception. Even if you only use a tablet app to calculate and ring up customers purchases, you still will collect data if they swipe their credit cards. That’s why you have to treat electronic data as carefully as you would any other written information. Should it get stolen or lost, it could harm both your business and your clients. If it does, then you might face a variety of challenges from disgruntled third parties. However, if you have cyber liability insurance, you might be able to better afford the costs of recovery. Here’s why.
What’s Cyber Liability Insurance
Cyber liability insurance is a very important piece of protection that almost any business should consider. If you use data, which most of us do these days, then you could probably benefit from looking into the perks of a policy.
A cyber liability policy falls under a larger umbrella of commercial liability insurance. These policies protect not just your business, but also third parties associated with it.
If the business were to have a problem, then that problem might harm others. Those parties therefore might expect the business to repay them for the losses they sustained. In some cases, they could even sue the business because of its mistakes. In these situations, a liability policy might help your business compensate those affected by your problems.
Specifically, cyber liability policies apply when the insured’s computer data gets destroyed, lost or even stolen by a malicious party. When data disappears, it first places the business in a precarious situation because the business might suffer an operational setback. However, that data loss could also impact clients.
First, consider the important information that you might have on your business’s computer systems. All of the company’s own data is likely very sensitive. You wouldn’t want it to get stolen. What’s also sensitive also is private customer data like credit card information, phone numbers, addresses, social security numbers and more.
Second, think of what might happen if this data disappears. The business might face a financial setback. You might be unable to continue with your services unless you can recover the data.
Furthermore, cyber thieves are always trying to find new ways to steal other peoples’ money and identities. If a customer’s data gets stolen from your system, therefore, their own security might come under threat. Customers might need your help to recover from the accident. That’s when a cyber liability policy might be able to step in to help you out.
The Coverage in Cyber Liability Coverage
Because a data loss often is a very complicated occurrence, then you might owe money to a variety of parties following. Cyber liability policies will usually help you in several different ways.
1. Notification Costs
When a cyber-attack occurs, you often have to notify (by law) those whose data was stolen. Therefore, you might have to reach out to your clients, a government department and others. With this coverage, you can pay for the expenses to make these announcements. Policies might also pay for public relations assistance to help you get control of the situation.
2. Customer Identity Protection
Following data theft, your policy might help you provide services to your customers so that they won’t have to worry about identity theft. Coverage might help them monitor their credit, social security number and other critical private information.
3. Data Recovery
This coverage can help you pay for the costs of restoring or redeveloping the lost data.
4. Extortion Reparations
If a hacker gains access to your data, they might threaten to steal or destroy it unless you pay them. In a way, this is a ransom attack. Your policy will usually apply to the costs that might arise from such attacks. If you do have to pay a ransom, your policy might reimburse you.
5. Loss of Income
The loss of data might interrupt your ability to do business. Therefore, you might lose income during the closure and subsequent recovery. This protection can help you recoup those losses.
6. Computer System Repairs
Coverage can help you repair and restore your computer systems following the attack.
7. Legal Assistance
In case a third party, like a client, sues you over the data loss, this portion of your coverage might help cover your legal costs and the resulting settlements.
8. Electronic Media Liability Protection
When you place data on the internet, a competitor or other party might view it as an insult. For example, they might claim you committed libel or slander against them by publishing this data. Some cyber liability policies will cover your losses when lawsuits related to these losses arise.
Various other types of protection might come as part of your company’s cyber liability insurance or greater protection. Therefore, work closely with your insurance agent to determine the right way to insure yourself in these cases.