Cyber Liability Insurance, what’s it all about?

Cyber Liability Insurance, what’s it all about?

By Janice Campbell, Commercial Account Executive

This past year has proven just how dependent the world has become on technology. With the move to a more contactless way of doing business, and the need to work remotely organizations are even more dependent on technology and data storage.

Have you ever thought about what would happen if your business experienced a data breach? If a data storage unit was stolen? If your client’s personal and confidential information got into the wrong hands?

It’s not pretty and it can be very expensive.

The core components of a cyber liability insurance policy are designed to help companies deal with the legal obligations and liability associated with a loss, theft or unauthorized disclosure of confidential information. That data breach I mentioned. Your traditional insurance policies only focus on physical damage or bodily harm, where cyber security and privacy liability focus on the risks that go beyond that.

Did you know that in the case of a data breach you could be responsible for the following expense?

  1. Coverage for claims seeking damages. These are most often class action claims.
  2. Coverage for legal representation for a regulatory investigation probing a data breach event
  3. Coverage for fines resulting from a regulatory investigations.
  4. Coverage for amounts that you are contractually liable to pay as fines and loss assessments to payment card issuers under a merchant services agreement to accept credit/debit card payments.

Legal liability coverage is one of the broad coverages included in Cyber policies. It can assist in covering the costs listed above. But it doesn’t end there. There could also be expenses related to the data breach response. Thinks like computer forensics costs, legal fees, consumer notification and credit monitoring expenses.

With a world dependent on technology, it’s wise to think about the risks that your business may face. I’ve been in the business a long time and now, more than ever, I’m discussing cyber security with my clients. It’s a discussion well worth having with your commercial insurance broker.