Cyber Liability Insurance – What Does It Cover and Who Should Have It?

If you own a small business, you know the importance of setting up a good insurance policy that covers damages to property, bodily injury, etc. – but have you heard of cyber liability insurance?

What is Cyber Liability Insurance and how do I get it?

If a disgruntled ex-employee steals client information online, digital documents or business property (website, profile, etc.) is damaged, or if your office is broken into and computers with personal files are stolen, it’s considered a cyber liability. Insurance for this cyber exposure didn’t exist until recently and was only cover under some CGL (Commercial General Liability) policies.

Data Breach and Cyber Liability Insurance policies are now offered by a variety of insurance companies. Coverage must be tailored specifically to the potential exposure and needs of each business. The premium for $1,000,000 of cyber liability insurance ranges from $500 for a small business to $1,500 or more for larger companies.

How do data breaches happen?

A data breach may happen intentionally through hacking, theft of equipment, employee theft of information, or deception to obtain unauthorized data. It may also occur unintentionally through the loss of property like a laptop, exposure online, improper disposal of data, or the implementation of vulnerable software.

What does cyber liability insurance coverage include?

First party response reimbursement:

  • Crisis management / public relations
  • Notification and remediation
  • Business interruption
  • Forensic and legal investigation
  • Electronic data restoration
  • Good faith advertising

Third party defense expenses for:

  • Individual and class action lawsuits

How important is cyber liability insurance?

For companies that handle and store personal information such as medical practices, cyber liability insurance is crucial. The potential for a cyber breach is especially high for companies that deal with credit card, health records, Social Security numbers, and other sensitive information. However, cyber liability insurance also protects the private information of the company and its employees – which applies to just about every business. Ultimately, cyber liability insurance ensures peace of mind and protects against financial ruin. It also helps employees and clients/patients build trust.

You might be considering cyber liability insurance if you’re thinking of buying a small business. Sunbelt Business Brokers can help you find an experienced broker to guide you through the process. But Sunbelt doesn’t just want to help you locate your next business venture, but to ensure that you have access to education and coaching for success through other resources. Ready for the next step? Search the many available businesses Sunbelt has to offer!

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