The small business you worked so hard to create and maintain may be a very attractive target for cybercriminals, who are unfortunately on the rise in a major way! Your sensitive information is fair game for thousands of individuals who have chosen fraud and other criminal activities as a way of life, and they thrive on targeting businesses that may lack a solid security infrastructure. A staggering 88% of small business owners feel vulnerable to a cyberattack, and inflation has left them with even less time on their hands to devote to keeping things safe.
What is Cyber Liability Insurance?
Cyber liability insurance is a type of small business insurance for breaches and threats that target data and linked computer systems. This includes credit card numbers, social security numbers, vital health statistics, account numbers, and driver’s license info. This form of insurance is also known as cyber risk insurance or cybersecurity insurance and is vital in a high-tech age of treason.
What Does Cyber Liability Insurance Cover?
Cyber liability insurance will cover the damage that you unfortunately suffer after a breach occurs. This includes crucial data recovery, identity recovery, and other investigative services to dig deeper and check out the criminals and the act itself. Cyber liability insurance also covers the damage that impacted on your business or customer’s partners because of the attack. Identity recovery pays for costs and services needed to take control of your identity information immediately following identity theft.
Cyber liability insurance will also cover the expenses related to other threat scenarios including a breach in your network and threat of extortion. You are also at risk for network or security wrongful acts, denial of service, and network outage situations. All of these are very debilitating to even the most established businesses, and customers are so thankful when they find out that they can weather a bit of the storm.
Cyber liability insurance will also assist with:
- Customer and employee lawsuits after privacy breaches.
- Lost income because of network outages.
- Public relations expenses rebuild reputation after a serious breach
- Ransom payments demanded for stolen data or intellectual property
- Regulatory fines
What is Not Covered by Cyber Liability Insurance?
It’s always best to closely review your cyber liability insurance policy for any detailed exclusions. Here are some common items that are not covered under a cyber liability insurance policy.
- Business Interruption while under third-party control: your policy may not cover business interruption costs from a computer system failure that originates from a third party, they left the interruption is covered under dependent system failure.
- Criminal Proceedings: your policy may not cover claims brought in the form of criminal proceedings, including criminal action. If a criminal investigation takes place or things escalate to a grand jury, these elements may not be covered.
- Intentional Acts: Serious fraud, criminal conduct, or wrongful acts done by employees all are in this category.
- Prior acts or Knowledge: These include any claims that you knew of before your active policy date.
- Subsidiary Outside of Your Control: This can include any incidents experienced for which you are not the official majority owner, or acting management control.
How Much Cyber Liability Insurance do I Need?
The amount of cyber liability coverage that you need will ultimately depend on your company’s levels of risk. Even though this may seem like a staggering amount of extra revenue going out, it is a type of security that will be an incredibly strong foundation holding you together if tragedy strikes. Meeting with us here at the Alexander Insurance Agency of Saint Charles can assist you with determining your appropriate amount. Here are some questions to consider while you are gathering information:
- Does your company collect, store, or send and receive personally identifiable information or information regarding health records?
- Are you involved in an industry that procures or promotes customer information, such as healthcare, education, or banking?
How Much Does Cyber Liability Insurance Cost?
The average cost of cyber liability insurance for a small business owner is about $150 a month. Here are some of the factors that determine what you will pay.
- Your company’s exposure to cyber risk.
- The amount of insurance coverage you need to be secure.
- Your company’s annual revenue.
- Your grade of network security.
- The number of people who have access to your operation and backups.
- Your detailed claims history.
What is the Difference Between Data Breach Coverage and Cyber Liability Insurance?
Data Breach insurance will come to your aid if you have sensitive financial data that becomes suddenly exposed. Any business can thankfully add additional coverage to your data breach insurance such as business income insurance. This will help with lost income if you are unable to operate post data breach. Cyber liability insurance can be viable for larger businesses that have so much at stake during operations. It offers very valuable protection from cyberattacks, as 66% of companies surveyed during 2023 claimed that they encountered difficulty feeling adequately prepared.
Cyber Liability Insurance vs. Technology Errors and Omissions
Technology errors and omissions insurance will cover damage caused by errors in the services you offer. Due to climate change and other environmental issues, power outages have become much more frequent over the past decade. These can result in lost sales for clients, which your E&O policy would cover. Cyber liability insurance will cover the costs ofs cyberattacks that originate outside your company. If you fall victim to a hacking incident, your cyber liability insurance covers expenses for data restorage. Safeguard your business against the damaging realm of cyber threats with Alexander Insurance Agency of St. Charles! Our comprehensive cyber liability insurance not only shields your company from financial risks but also provides unparalleled peace of mind. Discover how our coverage mitigates costs, allocates your essential protection needs, and allows us to ease your fears and empower your business to thrive securely in the digital age.