Cyber liability insurance policy covers businesses from unauthorized access, use of electronic data, or software, with a business network. Cyber liability insurance policies also provide coverage for claims that come about as the result of viral outbreaks, malicious code, extortion, computer theft, and other internet related losses. Losses may also include mistakes, errors, and omissions made by employees while on the job. We’ve written an article about cyber liability before, go here to read it.
Do You Need Coverage?
Companies lose billions of dollars because of various types of online fraud, data breaches, and other cyber related activities. In 2005, less than 1/3 of businesses experienced some degree of cyber liability or other insurance coverage for cyber fraud. Today, more than 60% now have some form of cyber liability insurance. As criminals become more internet savvy, the risk that customer’s data falls into their hands increases as well. Every industry that conducts business, in any manner online, is at risk. The risk grows daily. When certain customer and company information is at risk for falling into the hands of crooks, companies need to take steps to insure that their customer’s personal information is safe and guarded from unauthorized access.
Cyber liability policies vary as much as the businesses they protect. You should compare different companies and potential policies, just as you would with car insurance, to make certain what policy will best suit your individual needs. The following are some points to consider in the process of choosing:
- Prepare questions and personally interview companies before choosing a policy.
- Go over all the products with the insurer to make sure what they have available will cover you in case of a loss. Personal customer information, if leaked, causes businesses to fold, due to lack of trust on the customers behalf.
- Most insurance brokers perform an in depth look at current data protection plans and internal security measures you have in place. From there they suggest which products best suit your business.
- Go over the insurance company’s records. Know how they handle claims and breaches. Ask questions. A trustworthy broker answers your questions and is upfront about their coverage in multiple scenarios.
- Look at the scope of an insurer’s duty to defend and/or pay defense costs when a liability indemnity policy receives a claim. Do they cover court costs, lawyers’ fees, and other recovery fees if necessary?
- Make sure the brokers are knowledgeable with an in depth understanding of current products for protection available. Ask about the benefits and limitations of various products.
- GSL insurance alone is not effective any more. These policies don’t cover certain aspects such as electronic data. Read more about GSL insurance from Cyberinquirer.com.
Knowledge Is Power
In conclusion, almost all businesses rely on some form of technology. Today the cyber liability insurance market is constantly growing and changing. As a result, coverage needs to include new technologies and the need to protect more data than ever before. A myriad of policy types is available, whether the business is online or a brick and mortar store. Choosing an educated and knowledgeable insurance company makes all the difference should you ever need to make a claim. Make sure you understand all the policies ins and outs before signing on the dotted line.