A cyber insurance policy, sometimes called cyber liability insurance or cyber risk insurance, is an entirely separate financial product that allows companies to shift the costs related to such remediation from a cyber-based security breach or other incidents. The costs vary depending on whether the incident was a result of an employee theft, malicious virus or data breach and/or other similar event. Most insurance carriers in the US are now offering policies which cater specifically towards protecting companies from the potential financial loss arising from security breaches. In some instances, insurance companies will offer cover to a business if it has already incurred such costs and it is then threatened with a further loss due to the same breach.
One of the main reasons why it is important to consider this type of insurance policy is the increasing frequency of cyber attacks which have resulted in a large number of reports being submitted to different insurance providers. The incidents of cyber insurance are most common in the corporate world where most business is conducted via the Internet. However, the Internet is not the only possible medium through which data can be stolen. Most incidents of cyber attacks result in data being stolen from computers in public places. This data can then be sold to third parties who may then put in the online for profit. This is often in the form of credit card purchases or shopping.
The risks of these types of cyber based security breaches are significant and should therefore be addressed by any company that wishes to protect itself. One of the main benefits of these types of insurance policies is that they can be tailor made to suit the requirements of an individual company or organisation. For example, there are policies that are available that focus on companies that manufacture products that are used in attacks. Other forms of insurance policies are available to those that deal with financial data and also the protection against the misuse of confidential information. Many of these types of insurance policies can also help in dealing with the aftermath of a major breach. These include the recovery of data that was lost due to a data disaster.
These insurance policies cover different aspects of the various risks that a small business may come across. Some of these are as follows: firstly, there are general business insurance needs such as employee theft insurance which focuses on theft of property by an employee. The type of coverage given would depend upon the nature of the business and the industry that it belongs too. Another type of insurance policy that is available is risk coverage. This particular coverage ensures that when an employee is killed or injured or a business is sued because of an accident that was caused by the employee, compensation is paid. Any loss of profits suffered as a result of a lawsuit is also covered.
Other insurance coverage includes covering tech e security breaches that happen online. This would include things such as hacking, malware and viruses that might damage or destroy data. Claims that are submitted through these insurance companies are often times covered.
Payment is made directly to the company through credit card payments. Most of these insurance policies offer money back guarantees. Claims are paid through electronic methods and a proof of damage caused due to cyber security coverage can often be provided in the form of scanned receipts. In the event that actual damages are not covered through these insurance policies, there are replacement programs that may be available.
When selecting this type of insurance coverage for your small business, the Internet is one of the best resources to research. There are many online insurers that offer such programs. You can go through reviews and check out what other people think about such policies. This will help you determine if such policies are the right fit for your business. In addition, you should check with your state’s department of insurance to see what cyber insurance cost is applicable in your state.
As stated above, these policies provide for first party coverage. However, there are certain exclusions and limitations in these policies. Most of these exclusions are intended to protect you against the negative effects caused by a cyber attack. Therefore, it is important that you familiarise yourself with these limitations before signing up for these policies. Policies are generally inexpensive, and if your company is prepared for the worst, these policies will be even more beneficial.
Coverage for Costs of a Breach
Here are some first-party coverages you are likely to find in a cyber liability policy. These reimburse the business for costs it’s already incurred
- Data restoration
- Loss of income and extra expenses
- Cyber Extortion
- Notification costs
- Crisis management
Cyber Liability Insurance
If you own a business and are looking for the right type of insurance, consider investing in cyber liability insurance. This insurance protects against a wide variety of potential claims. The most common claims from cyber activities are intellectual property theft and information security breaches. In fact, nearly all claims made today involve some sort of information that has been stolen or otherwise compromised. Cyber liability insurance helps business owners protect their intellectual property from damages or loss.
When a company’s computer systems are breached and confidential or sensitive information is stolen, a number of potential problems can arise. Damages can be caused when data breaches result in harm to a customer or client, or when customers send confidential data or information to someone who is attempting to commit fraud. For example, data breaches may allow hackers to obtain access to a company’s secure database and then use it to gain access to a company’s customers’ personal details, such as social security numbers or bank account information. This information could then be used to commit fraud. Claims may also be made if personal information is compromised through cyber attacks and breaches.
There are many potential causes of these attacks. They range from malicious attackers working for a rival company to disgruntled employees or customers who want to take advantage of a system’s weaknesses. However, one of the main causes of cyber incidents is an employee or customer using a computer at work to transmit sensitive data over the internet. Cyber attacks can even come from within a small business itself. In these cases, a small business is responsible for notifying the appropriate authorities and taking steps to prevent or mitigate damage.
Many insurance companies provide cover liability insurance quotes to small businesses to determine whether the amount of coverage is right for their particular needs. Since many small businesses do not have employees, they often cannot afford to invest in specialised software to track computer activities. The costs of maintaining an IT department can quickly add up. Cyber insurance quotes are generally based on the amount of direct harm that could occur by an infected program. For example, if a program accidentally sends out thousands of spam emails to millions of people, each person would likely be individually liable for this amount.
Some other types of liability include misuse of company resources such as printers or photocopiers. This kind of cyber crime is often referred to as “cyber theft,” and can include stealing employee or client card information or confidential business information. General liability insurance, which is usually a requirement for larger corporations, will cover a wide range of damages if an employee uses your company property (or that of your clients) in ways that harm your business. If an individual deliberately or knowingly uses your company property in ways that harm your business, you can be held personally liable.
Other optional types of coverage that may be included in a general liability policy include property damage and liability claims. General liability insurance is more comprehensive than most insurance policies, because it not only covers liability claims but also protects you against claims stemming from the theft or loss of equipment. With these kinds of plans, the policy also covers you in the event that someone is injured using your property. You will want to check with your insurance agent to determine what is covered under your policy.
Coverage for Claims and Lawsuits
Most cyber policies include liability coverages like those outlined below.
- Network security and privacy liability
- Regulatory proceedings
- Electronic media liability
What Cyber Policies Don’t Cover
- Intentional dishonest acts committed by the insured.
- Bodily injury and property damage.
- War and terrorism.
- Contractual liability.
- Utility failure
- Acts committed before the retroactive date (if the policy has one).
- Cost of restoring computer systems to a higher level of functionality than they were previously.
Electronic Data Liability
The definition of Electronic Data Liability Insurance policies has changed over the years, but essentially they are designed to protect you against claims stemming from negligent or intentional acts of commission or omission. While we consider data breaches to be one of the leading causes of loss and damage throughout the world, other things which can result in a claim are misuse of personal information, computer fraud, online abuse, copyright or trademark infringement, wasteful disposal of assets and fraud. Other things which might also lead to data breach claims are faxes, emails, voicemail messages, files, discs, tapes and any other form of electronic media. The fact that there are so many potential sources of loss is often used by solicitors to argue a case. They take into account factors such as the amount of loss, whether the source was physical or digital, and whether it was likely to cause future harm.
Traditional commercial general liability insurance coverage does not usually cover claims stemming from negligence regarding information that causes damage to electronic data. In addition, a traditional general liability coverage definition of “real property damage” also typically excludes “electronic data” from the definition. While many states have enacted statutes that specifically address these issues, these statutes are often inadequate in addressing the unique needs of the insurance industry.
What Is the Electronic Data Exclusion?
Many of the general liability policies contain an “Electronic Data” exclusion. This is under Bodily Injury and Property Damage Liability. This exclusion eliminates coverage for damages arising from any of the following:
- Loss of electronic data
- Damage to or corruption of data
- Loss of use of data
- Inability to access or manipulate data
The electronic data exclusions are very wide. Basically it removes coverage for any third party property damage claim including electronic data related to the incident. For example, a landscaping employee is planting trees in an office complex, and one day he cut a fiber optic cable leading to the building’s internet connection, so the customers are without the internet for two whole days. Under the Electronic Data Exclusions as stipulated in the Commercial Insurance Quotation, the damage caused by this act is not covered.
In other words, under silent cyber exposure and what is known as exclusion, both claims are excluded. For example, if the tenant (who is insured) or the owner of the building (who is NOT insured) defaults on the lease agreement and there is a fire, or flood, or similar natural disaster, this too will be excluded under the commercial insurance quote. However, there may be certain events that would cause both claims to be ruled out, for example, a collision between vehicles, which would also qualify as a collision or loss of life. In such cases it would be wise to seek advice from an experienced insurance attorney.
What is important to note here is that most major insurers now have policies and/or discounts specifically aimed at reducing the risks of cyber crime, which include thefts, fraud, loss of data, and theft of intellectual property. Many insurers have begun including cyber insurance as standard with all their policies. This way they are reducing the risks faced by their customers and as such the number of claims that go unclaimed has gone down, leading to the increase in profitability of the insurers overall.
Cyber Insurance Costs
Cyber insurance, also referred to as electronic liability insurance, covers your company in case of a data breach or cyber attack in which customer data is compromised. Cyber attacks, which may range from simple malware attacks to ransom attacks, can incur a severe financial blow on your company over just a few minutes. For this reason it’s very important that you are prepared for all eventualities and that your company has established a cyber strategy. If you do not have a well thought out plan to protect your company from these risks, then your business may be in danger of being cyber attacked.
Cyber insurance cost analyses indicated in 2020, the average cost for cyber insurance was $1,485 per year. This was just a fraction lower than reported in 2019. In 2021 we seen a jump of 7% for premiums, average costs were $1589 per year for a $1 million in cyber liability coverage This was a clear reflection of the growing risks of insuring a small business against ransomware and cyber attacks
- 2020 Small Business Cost $1,485 Per year ($1 million Coverage)
- 2021 Small Business Cost $1,589 Per year ($1 million Coverage)
One of the major concerns consumers have right now is identity theft and the impact it can have on their credit reports, credit score and overall finances. The issue has been brought to light lately with the recent news that hackers have gained access to millions of accounts across the internet, many times with personal information being stolen. Because of this, the need for identity protection has become more important. In order to protect your financial future from being swindled, you need to be aware of fraud protection on the internet and what it can do for you.
- Fraudulent Activity
Cyber Insurance is one type of fraud protection online that has been proven to work and that’s because it works by going after fraudulent activity. Cyber Insurance goes after those activities that attempt to misuse your personal information. This includes accessing your accounts or attempting to gain unauthorized access to them as well as writing fraudulent charges against you. Cyber Insurance can go after even the most sophisticated hackers and protect your accounts from being hacked.
- Identity Theft
Identity theft does not only happen one time. Even if you’ve been the victim in the past, there is still a good chance that somebody will try to take advantage of you again. Many victims never get to tell their story because the people who committed the fraud will go away Scott free while the person they were supposed to protect suffers from fraudulent charges and has to deal with identity theft as a result. It’s simply not worth it when someone else gets to take advantage of you. So, to protect yourself, use secure sites like Cyber Insurance to take care of any fraudulent charges and keep your identity safe. If you ever think you are a victim of ID theft, then be sure to use Cyber Insurance to get an insurance quote for yourself and your family today!
A cyber insurance policy gives financial protection against any suspected or actual data breaches or cyber attacks that take place on the systems of your business. The dramatic growth in cyber attacks has made this kind of policy essential for many kinds of businesses to gain access to the cyber attacks no one is ever safe from a cyber attack. If you don’t have a cyber insurance policy you may be left vulnerable to cyber attacks and not even know it until it’s too late and your data has been taken or information has been stolen.
With so many new hacking techniques and ways of attacks on companies both large and small it is important for businesses to ensure they are adequately protected. Most businesses consider cyber attacks to be a form of crime and therefore consider having some form of insurance to protect themselves if cyber attacks were to occur. In fact most states consider cyber attacks to be just that, a crime. There are many forms of cyber insurance policies available today which can give businesses of all sizes adequate protection. There are even insurance policies available for smaller businesses as well to deal with the same cyber threats.
The cost of cyber attacks can be very costly for a business and there is no way to avoid this risk if you wish to protect your business. One thing is for sure however, you can never be too careful. With cyber attacks are happening daily, you need to ensure you are protected against them at all times. Make sure you do your research into cyber protection before taking the plunge into obtaining a cyber policy
When buying cyber insurance make sure to do your homework.