Who Needs Cyber Liability Insurance?

In the digital age, modern workplaces have become increasingly dependent on technology to pursue innovations and streamline daily operations. Regardless of industry or size, most commercial enterprises have increased their use of technology, software and online solutions. Furthermore, many cybercriminals have become more active in recent years as the increase in workplace technology has enhanced cybercrime opportunities. Given these conditions and the potentially devastating consequences of even a single cyber incident, understanding the value of cyber liability insurance is critical.

What Is Cyber Liability Insurance?

Also known as cyber insurance, cyber liability insurance provides a potentially critical financial safety net for policyholders regarding cyber risks and exposures. These policies establish a contractual agreement between organizations and their insurance companies and may provide essential funds and resources in response to cyber incidents, such as data breaches, malware infections and phishing attacks.

Why Do Organizations Need Cyber Liability Insurance?

Even companies that may implement robust cybersecurity measures are still far from immune to data breaches and other cyber incidents. All it takes is a single ill-advised click or lapse in judgment by one employee, and a cybercriminal could potentially gain access to your systems and cause catastrophic consequences.

While almost all organizations should strongly consider cyber liability insurance, this type of coverage may be of even greater importance for those that regularly store, manage or transmit sensitive data, such as the following:

• Health care organizations
• Financial service providers
• IT professionals
• Real estate businesses
• Retailers
• Educational institutions

What Does Cyber Liability Insurance Cover?

Although the exact capabilities, limitations and details of a cyber liability insurance policy may vary significantly, coverage may include financial assistance for the following losses and expenses:

• Incident response costs—This may include hiring digital forensics professionals to investigate the incident and notifying affected parties, such as customers whose data was compromised.
• Business interruption losses—This feature of cyber liability insurance may help organizations recoup lost income if a cyber incident disrupts their normal operations.
• Hiring additional help—This coverage may help pay for enlisting services needed to manage the aftermath of a cyber incident, such as IT contractors, crisis management teams and public relations firms.
• Cyberextortion payments—If a perpetrator uses ransomware to lock systems or commit blackmail with threats to release private data, this coverage can help pay for you to meet their demands.
• Legal expenses—This component of cyber liability insurance may help pay noncompliance fines issued by regulatory bodies or legal costs arising from lawsuits, such as attorney fees, settlements and judgments.

Get the Right Coverage

Given the ever-increasing use of technology in modern workplaces, the importance of versatile and robust cybersecurity measures, including adequate cyber liability insurance, cannot be overstated. Without appropriate coverage, even a single cyber incident could jeopardize an organization’s financial stability and future viability.

Contact the agents at Crossland Coverage today to learn more about your cyber liability insurance needs and options. We will work with you to assess your circumstances and procure an appropriate policy.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.