Do You Need Cyber Liability Insurance?

Business is evolving rapidly, changing from a world of brick-and-mortar locations to a world that’s constantly interconnected through the Internet. As our economy becomes more and more based in the world of cyberspace, more and more businesses are rapidly expanding digital footprint. However, the more business you do, the more prone you are to being targeted by hackers. Data breaches are unfortunately all too common these days, and they only seem to be getting bigger.

Business have a duty and a requirement to protect the sensitive and personally-identifiable information that their users input, such as names, addresses, and credit card payment information. If this information is stolen, the business could be held liable for the loss and any damages that occur as a result. Fortunately, the insurance industry has adapted and today business owners can purchase cyber liability insurance to protect themselves.

What is Cyber Liability Insurance?

To put it simply, cyber liability insurance is protection for the event you are hacked and sensitive information is stolen. A good cyber liability policy will pay for everything from business interruptions, the cost of notifying customers of the breach, and the cost of damages you may be responsible for. Some even cover the costs of a public relations firm to help repair the damage done to your reputation. The nice thing is this type of insurance is still fairly new, and many companies are still open to negotiation in terms of what’s needed, what’s covered, as well as premium costs and deductibles.

Do I Need Cyber Liability Insurance?

When you consider how many millions of dollars of liability you could incur as a result of even a small breach, this sort of coverage is almost a no brainer. If you do business online, you should carry cyber liability insurance. Even if you have just a single customer, losing their information to a hacker could be devastating when you consider the costs it could bring about. Business interruption alone can cause most small businesses to fail, let alone the tremendous expenses associated with repairing the damage.

Furthermore, it’s important to remember that your general policy won’t cover you in the event you incur losses because of online business dealings. General insurance is designed for things like break-ins and natural disasters, most don’t include things that happen because of the Internet.