How Much Cyber Liability Insurance Do I Need
The amount of cyber liability coverage you need depends on your companys specific risk. Its a good idea to talk with your insurance agent to determine the appropriate amount to meet your business needs. Here are some questions to consider:
- Does your company collect, store, send or receive personally identifiable information or personal health information?
- Is your company in an industry with rules about customer information, such as education, finance or healthcare?
What Does Paychex Cyber Liability Insurance Cover
Take the necessary steps to protect the data stored and used by your business, as well as preserve your customers trust. That means knowing exactly what cyber insurance covers. Depending on the policy you choose, cyber liability coverage generally includes:
- Coverage for stolen or lost devices
- Protection if youre a victim of hacking and viruses
- Liability for slanderous blog content
- Data corruption and/or E-theft
- Crisis management
Why Small Businesses Need Insurance
We hear a lot from small businesses that think they wont ever have to deal with a cyber breach. Its a common perception among small business owners: the idea that it will never happen to me.
Unfortunately, the data just doesnt back this up.
Small businesses are actually more likely to be targeted by cyber criminals. Smaller businesses are the target of choice for hackers because theyre seen as less secure and easier to exploit. This is why more than 70% of cyber attackstarget small businesses,not large corporations. The large-scale data breaches that we see in the news are just the tip of the iceberg. For every large corporation that is breached, thousands of small businesses are being targeted. Its estimated theres a hacking attempt every 39 seconds, and small businesses bear the brunt of that assault.
If a company handles sensitive data, such as healthcare or credit card information, then there is an obvious risk with respect to a cyber breach. But even businesses that do not handle this kind of information are at risk. At the end of the day, cyber crime is about money, and hackers can make money no matter what data their target has.
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Data Loss Caused By Accidental Damage
While a cyber insurance policy covers data lost in a software attack, it does not insure data lost from accidental physical damage to a network or storage device.
Electronic data liability coverage expands your property damage coverage in a business owner’s policy to include a loss of data caused by accidental damage to a customers computer, hard drive, or other data storage equipment.
How Do Cyberattacks Happen
Cyberattacks can happen when the network security at a business is not up to date, or the employees lack the training or knowledge to recognize phishing attempts, ransomware, and other cyber hacking red flags.
According to a recent report, 82% of ransomware attacks target small businesses. Many ransomware gangs are attempting to extort companies that are lucrative enough to pay a heftier ransom amount, but also small enough in size to make hacking attempts easier, as well as keep any media and law enforcement attention low during the fallout.
When a data breach or cyberattack incident occurs at a business, cyber liability insurance can help defray costs to the business and help a company to survive the breach.
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What Is Cyber Liability Insurance
Cyber liability insurance protects your business from the cost of cyber threats or breaches involving computer systems and data. That can include sensitive customer information, such as credit card numbers, Social Security numbers, account numbers, health records and drivers license numbers.
Cyber liability insurance is also known as cybersecurity insurance or cyber risk insurance.
What Is Data Breach Insurance And Cyber Insurance Add
Data breach insurance and cyber insurance can be purchased as an add-on to a general liability, professional liability, or business owners policy , which is also called property & liability insurance. It helps cover costs related to system hacks or data security breaches in which sensitive information has been stolen and fraud has occurred or there is a reasonable expectation that it might occur.
This add-on coverage may pay, up to its limit, for incident response expenses like informational materials, help line, credit report monitoring, identity restoration case management, and certain services provided to affected individuals .
It may also pay for suits brought against you for a covered event:
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Best For Healthcare Professionals: The Doctors Company
The Doctors Company
Because healthcare professionals deal with more risks and regulations, our choice for the best cyber insurance company for this industry is The Doctors Company. Its CyberGuard Plus option offers up to $5 million in cyber liability insurance with comprehensive coverage.
Limits up to $5 million
Includes cyber extortion and website media content liability coverage
Other insurance options available for your business
Must already have a medical liability policy
Online quotes not available
Healthcare professionals deal with very sensitive patient information and are in a highly regulated industry. As such, physicians, surgeons, dentists, and other medical professionals likely need much higher cyber liability insurance limits than other businesses.
While many companies have a $1 million maximum, The Doctors Companys CyberGuard Plus provides cyber liability insurance with limits ranging from $1 million to $5 million. Available only to members of The Doctors Company, CyberGuard Plus increases the limits you have on your medical liability policy for added protection.
CyberGuard Plus contains the following coverage:
- Data security and privacy liability
- Privacy breach response services
- First-party network business interruption
- Patient notification services
The Doctors Company is the largest physician-owned medical malpractice insurer in the country, with 80,000 members and over $6 billion in assets. AM Best assigned the company an A rating.
Cyber Insurance Vs Tech E& o
Cyber insurance wont cover you for claims related to the performance of your product or service. If youre a technology-based business, youll also want to consider Technology Errors and Omissions insurance. This type of professional liability coverage protects you in the event your product or service didnt perform the way it was supposed to.
For example, a developer for an e-commerce software company accidentally causes a system outage that results in lost sales for several clients. Tech E& O can protect against claims from the software companys negligence and deficient product.
Think you might need Tech E& O insurance? > Learn more about your professional liability options.
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The Value Of Cyber Insurance For Small Businesses
Businesses of all sizes face the daily threat of falling victim to cyberattacks. While it’s often more common to hear stories about the major corporations suffering from data breaches, small businesses can be easy targets to hackers.
What happens after a cyberattack?
Companies that are victims of cyberattacks need to ensure they understand how to respond properly to the incident. It’s important to take action right away to help minimize the damage, including these steps:
Containing and assessing the breach
Determining what servers were compromised in the cyberattack helps to contain them as quickly as possible. It’s vital to keep any other servers and devices from becoming infected or breached, and it also helps preserve critical evidence for assessing what happened and who was responsible. Contain the breach by disconnecting the internet, disabling remote access and maintaining any firewall settings. If there are any pending security patches or updates, install them immediately. Passwords should also be changed with a global password reset, and ensure all employees create new, strong passwords for each of their accounts.
Utilize the data breach response plan and contact the insurance carrier
Secondly, the plan should include information about what defines a data breach requiring a response, a designated response team, and the types of messaging and communication methods to be employed.
What does cyber insurance cover?
Who Needs Cyber Liability Insurance
Any business that stores or processes sensitive information should consider cyber liability insurance. Consider coverage if you store data such as customer names and addresses, Social Security numbers, medical records, and financial information such as credit card information.
Here are examples of businesses that could benefit from a cyber liability insurance policy:
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Why Are Cyber Incidents So Costly
Many small businesses never get cyber liability insurance because their owners dont think theyre at risk of a hack. Sources report that more than two out of five cyber incidents happen at smaller organizations. The cost of these breaches to small companies often approach or exceed six figures. That is usually enough to close a small business down.
Heres how cyber costs can add up:
- A cyberattack shuts down the software a retailer depends on for customer payments. The company misses four business days of work and revenue while its unable to complete transactions. Cyber liability protection can pay for the business interruption expenses and revenue losses resulting from the cyber incident.
- A client sues a cyber security business for failing to prevent a ransomware attack. The court rules that the security business must pay the ransom demand needed to recover the data, in addition to covering legal defense costs and damages. Cyber insurance would pay some or all of these expenses.
- A data breach exposes the sensitive health, insurance, and payment information of hundreds of patients at a clinic. The clinic has to pay for a credit monitoring service for all their patients for several years, costs to communicate with patients about the issue, and for a public relations campaign to fix the clinics damaged reputation. Cyber coverage would help pay for these professional services.
Why Is Cyber Security Insurance Important
Cyber insurance is important to the financial well-being and future of your small business. A single claim can be costly and difficult to overcome on your own. Cyber security insurance helps reduce the potentially devastating effects of a claim. It can cover costs related to IT forensics investigation, data restoration, legal liability and customer notification.
A cyber insurance policy allows you to spend less time worrying about cyber threats and more on what matters most: running your business. Get a free quote to learn which cyber insurance coverages to consider for your situation.
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Best Cyber Liability Insurance Companies
Cyber liability insurance is often an add-on to your other business insurance coverage. However, you can shop for it as a stand-alone policy. If you do, its essential that you get quotes from multiple insurers. Because of all the variables that go into calculating cyber liability insurance premiums, its important to compare quotes from different insurers to make certain you get the right coverage for you at the best possible cost. Here are our recommendations of the best cyber liability insurance companies and the best data breach insurance companies for your consideration.
Does My Liability Or Third
Most business insurance policies will pay for the cost of physical damages to hardware or other assets. These may be harmed in a cyberattack. But, it is unlikely that your business’s liability or third-party coverage will cover the costs associated with other losses from a data breach. You should read your business insurance policy to confirm what type of coverage you have. Most business owners should be prepared to purchase a separate cyber insurance policy.
Most of the financial burden that follows a data breach has several sources. These include government fines, system downtime, and reputational damage. Other sources are data recovery and other expenses. These may include external vendors such as forensics investigators, public relations firms, and lawyers. Your policy must explicitly state that those expenses will be covered in a cyberattack. Otherwise, your business is unlikely to receive a claims settlement from your insurance to cover the costs described above. Many companies providing cyber insurance are able to customize coverage. This extends the coverage that is not included in your standard business insurance policy.
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Why Cyber Insurance For Small Business Is So Important
Cyber coverage is vital because you dont want to be swamped by legal fees if theres a hack. And because the best way to protect businesses is to be proactive when it comes to cyber threats. Like a data breach.
Here are five more reasons you need to guard against these cyber risks with comprehensive policies.
- You Get Coverage For Stolen or Lost Devices: Cyber liability insurance covers tablets, mobile phones and laptops. Not just from malware-type cyber events. But from theft and loss.
- You Get Forensics: Great network security coverage can determine how bad a breach is. Forensic services can uncover cyber incidents caused by employees or insiders.
- You Get Protection From Hacking and Viruses Damage: A business interruption clause can cover lost income. Modern businesses need this cyber policy to cover compromised data too.
- You Get Theft and Data Corruption Coverage: Data recovery after a hack is essential. Especially when company data and/or customer information is affected.
- You Can Get PR Help: Good insurance policies can help rebuild your brand. Another reason to get business insurance like this.
Why Do Small Businesses Need To Get Cyber Liability Insurance
Cyberattacks and data breaches are costly, and they happen more and more often every year. Small companies may have poor cybersecurity protection, making them attractive targets for thieves. In more than half the cases, businesses are forced to shut their doors after a cyber security attack.
Cyber coverage helps your business recover from financial losses resulting from cyberattacks and data breaches.
If your business handles and stores sensitive information, like credit card or social security numbers, you need cyber coverage.
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Best For Nonprofits: Cyberpolicy
Nonprofit organizations are always on a tight budget, so we selected CyberPolicy as the best insurer for this category. As an insurance agency rather than a direct insurer, CyberPolicy allows you to get multiple quotes for cyber insurance, and coverage can begin within 24 hours.
You can get an instant quote online.
Coverage can begin within 24 hours.
You can purchase a standalone policy or insurance package.
It is not a direct insurance provider.
Experience may differ depending on the insurer.
Launched in 2016, CyberPolicy isnt a direct insurer. Instead, its an online shopping platform. Customers can fill out a form and submit their information. Theyll get quotes back from multiple insurance companies, allowing them to compare coverages and pricing so they can pick the best policies for their needs and budgets.
Coverage limits are dependent on your business, location, and industry as well as the insurer you choose.
With CyberPolicy, you can purchase a standalone cyber liability insurance policy or bundle cyber insurance with professional liability, workers compensation, general liability protection, commercial auto insurance, and much more. CyberPolicy offers multi-policy discounts, so bundling your coverages can help you save money.
CyberPolicy allows you to get a quote for cyber liability insurance online. Your insurance will include the following:
What Is Not Covered
- Criminal Proceedings: We wont cover claims brought in the form of a criminal proceeding, such as a criminal investigation, grand jury proceeding, or criminal action.
- Funds Transfer: Other than transfers associated with cyber crime coverage, we wont cover claims for loss, theft, or transfer of funds, monies, or securities.
- Infrastructure Interruption: We wont cover claims from failure or interruption of water, gas, or electric utility providers.
- Intentional Acts: We wont cover any fraud, dishonesty, criminal conduct, or knowingly wrongful act of the business or its employees.
- Prior Acts or Knowledge: We wont cover any claims you had knowledge of prior to the policy period.
- Subsidiary Outside Control of Named Insured: We wont cover any incident experienced by a subsidiary you do not have majority ownership or management control of.
- Business Interruption from Systems Under the Control of Third Parties: We wont cover business interruption costs from a system failure of a computer system owned by any person or entity that is not an insured .
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Is Cyber Risk Insurable
Risk Strategist & Workers’ Compensation Expert Certified Insurance Counselor Cyber Risk Specialist Captives Helping Businesses Prevent
The cyber insurance markets prospects have been grim with some improvement. However, it is one mega loss away from collapsing.
Why? Aggregation, ransomware & business interruption are worsening significantly according to a recent report by AM Best, which provides financial news, data products and services for the insurance industry.
The report cites several key factors for the less-than-deal outlook — the rapid growth in exposure without adequate risk control the growing sophistication of cybercriminals, who have exploited malware and cyber vulnerabilities faster than companies can protect themselves the far-reaching implications of cyber risks cascading effects, and the lack of geographic or commercial boundaries.
Despite increasing acceptance for cyber insurance, the extent to which the coverage will continue to be generally available and affordable is uncertain, according to a new report from the US Government Accountability Office . Insurers’ appetite and capacity for underwriting cyber risk has contracted recently, according to the report, which goes on to say the cyber-insurance industry faces multiple challenges including limited historical loss data that can make it difficult for insurers to estimate potential frequency and severity of losses and price policies appropriately.
What Does Cyber Insurance Cover
Cyber insurance covers a variety of small business risks that are divided into two parts:
First-party coverage Covers damages that you and your business suffer because of a data breach. This can include things like investigative services, business interruption coverage and data recovery.
Third-party coverage Covers damages if your customers or partners are affected by a cyber attack on your business. This can include legal fees, settlement costs, security failure and media liabilities.
How much coverage you need depends on your business’s specific risk. Smaller cyber risk policies can usually be added to a business owners policy . Many businesses need higher limits than whats available on a typical stand-alone policy.
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