Why Your Business Should Have Cyber Liability Insurance

Why Your Business Should Have Cyber Liability InsuranceWith the recent reports of data breaches in the news, you probably know that cyber attacks on businesses are a reality. Companies, both large and small, can suffer from data breaches that compromise their customers’ private information. In fact, companies with fewer than 100 employees are the hacker’s biggest targets. Part of any complete risk management strategy should include a cyber liability insurance policy.

There are both federal and state laws that impose duties and penalties for non compliance on holders of personally identifiable information as well as protected health information. At the federal level, consumer protection and privacy laws can impose fines and penalties associated with regulatory proceeding from security breaches. There are 46 different state laws that apply to privacy that can also be brought as basis for suits against holders of data of others. Failure of businesses to safeguard this data can result in major expenses to the business. If a breach happens, individuals can sue the company for negligence, and the government can get involved. A cyber liability policy helps business recover from a data breach by providing funds to cover costs usually associated with:

  • Notifying customers that a breach occurred, and that their personal information might have been compromised.
  • The costs associated with regulatory proceeding. When a breach occurs, the government gets involved to investigate if the company complied with federal and state laws.
  • Attorney fees associated with the investigation.
  • Fines and penalties that may be owed, depending on the result of the investigation.
  • Any claims paid.
  • Crisis management counseling and communication services.
  • Lost business revenue, if the company has business income insurance.

In today’s online world, cyber liability policies are becoming more and more widely available, but not many businesses are taking advantage of the coverage. Any size company that has data of other in their care is exposed to potential breaches, even if the best software protection is used. If you’re interested in learning more about how cyber liability insurance can help protect your business, the AssuredPartners NL CORE Solutions team can help. To learn more or contact an agent, visit: AssuredPartners NL CORE Solutions.

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