How To Get Small Business Cyber Liability Insurance Coverage
Cyber Liability Insurance for small businesses: According to the U.S. Small Business Administration – SBA, small businesses are an appealing target for cybercriminals because they have sensitive information and typically lack the security infrastructure of larger businesses. This includes personal information from your customers, such as credit card numbers and Social Security numbers.
According to a recent SBA survey, 88% of small business owners believe their company is vulnerable to a cyberattack.If your company is a victim of cyber crime, recovery costs can be high,including specialized repairs and legal fees.
You may want to purchase cyber liability insurance in order to get the best small business insurance policy.
What Exactly Is Cyber Liability Insurance Coverage?
Cyber liability insurance policy protects your company from the costs of cyber threats or breaches involving computer systems and data.Credit card numbers, Social Security numbers, account numbers, health records, and driver’s license numbers are examples of sensitive customer information.
Cyber liability insurance is also referred to as cyber risk insurance or cybersecurity insurance.
What Are The Things Cyber Liability Insurance Cover ?
Cyber liability insurance protects your company from the consequences of a cyber security breach.
These expenses include investigative services, data recovery, and identity recovery.Data recovery insurance covers the costs of recovering your data after a breach.Identity recovery covers the costs and services required to regain control of your identity information after identity theft.
Cyber liability insurance also covers damage caused by a cyberattack to your customers or business partners.
These damages include legal fees, customer notifications, and cost of settlement.
“Cyber liability insurance coverage can cover costs and expenses associated with a variety of cyber threat scenarios, such as suspected network intrusions and cyber extortion threats, data breach, network or security wrongful acts, denial of service, and network outage situations,” says Bryan Smith, vice president of product management at The Hartford.
Cyber liability insurance can also cover the following expenses:
- You must pay a ransom to regain access to your data.
- Lawsuits filed by customers and employees as a result of privacy violations
- Income was lost due to network outages.
- Regulatory penalties
- Costs of public relations to repair your company’s reputation following a data breach
What Are The Things Cyber Liability Insurance Do Not Cover?
It’s a good idea to go over your cyber liability insurance policy to see if there are any exclusions.
Here are a few examples:
Intentional actions:
This includes intentional fraud, criminal conduct, or wrongful acts committed by you or your employees.
Previous actions or knowledge:
This includes claims you were aware of prior to the start of your coverage.
Subsidiary that is not under your control:
This could include any incident involving a subsidiary in which you do not own a majority stake or have management control.
Criminal proceedings underway:
Your policy may exclude claims arising from criminal proceedings, such as a criminal action, a criminal investigation, or a grand jury proceeding.
Business disruption caused by third-party-controlled systems:
Except for interruptions covered by dependent system failure, your policy may not cover business interruption costs caused by a third-party computer system failure.
Potential Cyberattack Types
A cyberattack on your company could result in:
Breach of data:
Breach occurs when critical information, such as personal financial information, is stolen.
Attacks on computers:
Your computer system is hacked and compromised in this type of cyber-attack.
Extortion via the internet:
During an extortion threat to your company’s computer system, thieves may demand ransom payments.
Who Should Get Cyber Liability Insurance?
Any company that stores or processes sensitive data should consider purchasing cyber liability insurance coverage.Consider this type of insurance coverage if you keep data like customer names and addresses, Social Security numbers, medical records, and financial information like credit card numbers.
Here are some examples of businesses or establishments that could benefit from cyber liability insurance:
- Consultant
- Accountants
- Contractors
- Barbershops and hair salons
- IT support or services
- Marketing businesses
- Real estate brokers
- Retailers
- Restaurants
What Amount of Cyber Liability Insurance Coverage You Need?
The amount of cyber liability coverage you require is determined by the nature of your company’s risk.
It’s a good idea to consult with your insurance agent to determine the right amount for your company’s needs.
Here are some questions to think about:
- Do you collect, store, send, or receive personally identifiable information or personal health information at your company?
- Is your business in an industry with customer information rules, such as education, finance, or healthcare?
What Is the Cost of Cyber Liability Insurance Coverage?
According to Insureon, the average cost of cyber liability insurance for small business owners is $140 per month.Your expenses will be determined by several factors, including:
- Your company’s cyber risk exposure
- The amount of insurance coverage required by your company
- The revenue of your company
- Your network’s safety
- The number of people who have access to your data and systems.
- Your previous claims history
There are options for both small and large amounts of cyber liability coverage.A small cyber liability insurance policy could be added to insurance for business owners.A larger cyber liability policy with higher limits would necessitate its own policy.
What Is the Distinction Between Data Breach Insurance and Cyber Liability Insurance Coverage?
If sensitive financial data is exposed as a result of a data breach, data breach insurance will help your company.
Additional coverage, such as business income insurance, can be added to data breach insurance to help replace lost income if you are unable to run your business due to a data breach.
Cyber liability coverage is intended for larger businesses that require additional cyber protection.
This insurance assists larger companies in responding to cyber attacks and, more importantly, recovering as a business from cyber damages.
Technology Errors and Omissions Insurance vs. Cyber Liability Insurance
Technology errors and omissions insurance is a type of professional liability coverage that protects your company from damages caused by errors in its technology products and services.
Cyber liability insurance coverage, on the other hand, covers the costs of external cyberattacks.