What Is Cyber Liability Insurance Coverage?

What Is Cyber Liability Insurance?

 

Every day we see a company that has been the victim of a data breach or cyber-attack in the news and on social media.  Many times this news is from large corporations. We don’t hear of the small businesses that have data stolen or are victims of cyber-attacks. Every type of company uses technology to do business, and they all face cyber risks, from stolen data to hacking emails. These risks increase as technology becomes more advanced and prevalent. This is why all businesses need to be prepared for cyberattacks with cyber liability insurance and a security plan.

 

What Does Cyber Insurance Cover?

 

Cyber liability insurance can cover the cost and business liability of data breaches involving sensitive customer information and cyber attacks on your business. The coverage can include:

 

• Business interruption

• Ransomware

• The cost of investigative services and data recovery

• Third-party damages if your customers or clients are affected as a result of a cyber-attack or data breach involving your business or company.  Legal fees, settlement costs, and social media liabilities are all examples of this.

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Business Interruption and Cyber Liability Insurance Coverage

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Business interruption coverage provides protection for businesses when there is a direct loss of income from a data or security breach, cyber attack, or victim to ransomware or phishing schemes.

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Business interruption coverage reimburses your business to make up the gap or difference between the company's normal income and the reduced income during the downtime brought on by a cyber attack.

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It is important to consider that business interruption coverage is not included in all cyber liability policies.  Be sure to review your coverage with your insurance professional to be sure you have the appropriate coverage for your needs.

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How Much Cyber Liability Insurance Do I need?

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 Net Diligence is a cyber security consulting firm that provides a comprehensive cyber liability calculator to determine the amount of coverage you should carry.  The calculator is here: Cyber Liability Coverage Calculator.  This tool estimates your business's cyber liability claim cost if you were a victim of a cyber-attack or system hack.

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Cost is also important in determining the amount of Cyber Liability coverage you should carry.  Your budget is an important factor in finding out the appropriate amount of coverage you need.  We work with you to determine the right coverage amount based on your budget.

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How Much Cyber Liability Insurance Should A Business Purchase?

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Cyber attacks and data breaches have increased in the last few years, as has the cost of repairing the damage after an attack has occurred.  Many small to medium size businesses typically purchase a cyber liability insurance policy with a $1 million per event limit, a $1 million aggregate maximum, and a $1,000 deductible. For larger data-driven businesses coverage limits of $3m or more are recommended. 

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Use our free cyber liability coverage calculator to help determine the amount of coverage you should carry to help protect your business.  The Overmyer Insurance Agency can help you find out how much coverage you should have, what your cyber risk exposure is, and get cyber liability insurance quotes from multiple companies.

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How Much Does Cyber Liability Insurance Cost?

 

Overall, the cost of cyber liability policies is generally inexpensive given the coverage that is provided. The cost of cyber liability coverage depends on your business's specific risk and coverage needs.  Small cyber liability insurance policies can be included in your Business Owners Policy (BOP), but if your business needs increased coverage, this would need a separate policy.

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What Types Of Businesses Need Cyber Liability Insurance Coverage?

 

Any business, whether a larger company or a small mom-and-pop shop that utilizes technology to conduct business needs cyber liability protection.  Business examples are:

 

• Coffee shops that provide free wifi

• Service businesses such as CPAs, attorneys, financial advisors

• Hair salons 

• Restaurants

• Retailers

• Contractors

• Real estate agents

• Consultants

 

Additionally, if you use a third party that handles your customer's data and information, such as accountants or IT service providers, they should have their own cyber insurance coverage.  Be sure to request a copy of their policies before hiring them or bringing them on board your business.

 

If your company or business keeps any form of customer or client data and information you should have a cyber liability policy.  

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What Is A Retroactive Date On A Cyber Liability Policy?

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A retroactive date on a cyber liability policy is the date from which the coverage provided by the policy applies. This means that any incidents or events that occurred before the retroactive date would not be covered by the policy. The retroactive date is typically specified in the policy language and may be the date that the policy was purchased or the date that the policy went into effect. It's important to carefully review the retroactive date on a cyber liability policy to ensure that it provides the coverage you need.

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How To Negotiate A Retroactive Date On A Cyber Liability Policy

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When negotiating a retroactive date on a cyber liability policy, it's important to first determine what date you want the policy to cover. This date should take into account any past incidents or events that you want the policy to cover, as well as any potential future risks that you want to protect against. Once you have determined the date you want the policy to cover, you can discuss it with your insurance provider and negotiate a retroactive date that meets your needs. Some points to consider when negotiating a retroactive date include the cost of the policy, the level of coverage provided, and any exclusions or limitations that may apply. It may also be helpful to compare the terms and conditions of the policy with those offered by other providers to ensure that you are getting a good deal.

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Cyber Liability Claim Examples:

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• Ransomware/Cyber extortion 

• Unauthorized access 

• Privacy breach 

• Lost or stolen laptops 

• Businesses hacked

• Spyware & Viruses

• Human error

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Where To Purchase A Cyber Liability Insurance Policy

 

Conducting a quick search online for cyber liability coverage provides an overwhelming amount of companies and information meant to sell you cyber liability insurance coverage.  The most simple solution is to reach out to The Overmyer Insurance Agency. We work with many different companies and we analyze your needs and find the right company and coverage for your unique needs.

 

Cyber liability insurance companies that we partner with include:

 

Progressive

At-Bay

CNA

Travelers

Hartford

Next Insurance

Liberty Mutual

Nationwide

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Important Cyber Security Tools:

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GCAToolkit:  A feature-rich site provided by Mastercard to provide the tools for small businesses to take immediate action to secure their systems and reduce cyber attacks.

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We look forward to reviewing your risk and finding the right coverage program for your business, click or call today.

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