What Does a Cyber Liability Policy Cover? Blog | What Does a Cyber Liability Policy Cover?
Cyber 03/08/19

What Does a Cyber Liability Policy Cover?

The enhanced accessibility of electronic data storage has created new opportunities for businesses to digitize processes and streamline efficiency from top to bottom. While cloud computing has revolutionized the way firms store and apply data, these advancements also come with their own risks.

Cybercrime has emerged as a major threat to every company’s proprietary information, making it imperative to be protected with cyber liability insurance coverage in the event of a breach. But, what does a cyber liability insurance policy cover and how can it shield your company from unwanted financial losses? Keep reading to learn about Cyber Insurance and why you need it.

 

What Does Cyber Liability Insurance Cover?

Several large companies have been the victim of cyberattacks in recent years, including Equifax, Target, American Express, Home Depot, Wal-Mart, and Yahoo. These events have resulted in billions of dollars in losses and litigation costs. But, cyberthreats affect small and medium-sized businesses too.

According to Accenture, in 2019 over 40% of cybersecurity incidents affected small businesses. Despite this, less than 15% of small business owners stated that they are prepared to protect their company from the threat of an attack.

So, what is cyber liability insurance and how does it protect you? A cyber liability insurance policy will protect your company against theft of your electronic data and information, along with any ensuing litigation that may occur after the fact. Coverage is distinguished between direct (first-party) and indirect (third-party) losses incurred in the wake of an attack, along with other miscellaneous expenses covered. Most liability policies will cover your company for all three categories, but it is useful to understand their distinctions.

First-Party Coverage

First-party coverage provides your company with protection against liability that is specific to the data breach, including the following:

  • Costs to determine if and how the breach occurred
  • Replacement and repair of electronic data systems and computers
  • Customer notification expenses
  • Threats or extortion by cyber criminals
  • PR and crisis management fees
  • General losses in revenues directly affected by the incident

Consider healthcare providers and healthcare insurance companies. Both are liable for protecting electronic patient health information (or ePHI); thus, both should have first-party coverage.

Third-Party Coverage

Third-party liability coverage shelters your company from ensuing financial losses or theft as a result of a cyberattack on associated businesses, for example:

  • Customer claims and settlements
  • Fines
  • Legal fees
  • Costs incurred to repair your company’s reputation
  • Copyright infringements
  • Later abuse of company data such as email hacking or misuse of electronic communication

In sum, these are cyberattacks inflicted on third-party companies with which the insured company works in tandem. Think about those healthcare providers and healthcare insurance companies again. They have to transfer ePHI back and forth to each other. If one loses the patient’s sensitive data, the other could be liable.

Miscellaneous Expenses

Additionally, a cybersecurity event can result in losses that do not specifically fit into first or third-party liability coverage; these include:

  • Terrorism and other crimes
  • Future revenue losses
  • Stolen intellectual property
  • Other intangible losses

It is worth noting that insurance providers will always modify your policy to fit your specific business’ needs, taking into account your company’s size, industry, and IT utilization. Of course, the cyber risk to your business is key in determining the level of protection required.

 

Cybersecurity Risks

A data breach will directly affect your company’s profit and loss, with the average security breach costing a small or medium-sized business between $100,000 and $300,000. This risk is compounded when considering the ever-changing nature of technology and its integration into a growing enterprise, with Accenture projecting that cybersecurity incidents will cost companies over $5 trillion in the next five years. So before you become too consumed with asking what is the average cost of cyber liability, remember that it’s nothing compared to the cost of a data breach.

It is almost impossible to completely mitigate the risk of a cybersecurity attack. Your company’s sensitive data can be compromised in a variety of ways:

  • Not updating your firm’s security hardware or software in a timely manner
  • Contracting BPO’s whose security is at risk
  • Clicking on phishing emails aimed at accessing your business’ network
  • Not employing two-factor authentication / password hacking
  • General employee negligence when using IT
  • Targeted attacks from hackers
  • Lack of investment in data security measures

While managers and business owners can temper some of the above risks through preventative measures, many of these potential threats fall outside the spectrum of management’s influence. Unfortunately, minimizing the risk of a cybersecurity incident is dependent upon the accountability of employees and contracted third-parties.

 

Minimizing Cybersecurity Risks

Your company can protect its reputation and minimize the risk of a security breach through proper IT practices, including consistent maintenance of IT and data systems, employee awareness programs and simulated phishing emails, conducting security due diligence when contracting third-parties, and investing in measures to combat potential threats and extortion.

Still, cybersecurity breaches are occurring increasingly often, forcing small and medium-sized businesses to pay millions in out-of-pocket expenses to lawyers and angry customers, with some permanently closing their doors or falling into bankruptcy. For a modern enterprise, cybersecurity insurance coverage has become an essential facet of protecting your business against external threats, regardless of company size.

Is your business covered?

 

 

Sources:
Blog

Tips for protecting yourself and your business.

Healthcare

Malpractice Insurance FAQs: What Is a “Retro Date”?

Pharmacy

Why You Should #ThankAPharmacist This Month

Mental Health

Why School Counselors Should Consider Malpractice Insurance

Insurance Basics

Am I Legally Required to Get Small Business Insurance?

Occupational Therapy

Liability Risks for Occupational Therapists

Insurance Basics

What Are the Exclusions on a General Liability Insurance Policy?

Nurses

Nurse Liability Insurance: 7 Reasons to Get a Policy Even If Your Workplace Is Covered

Lab Technician

Four Common Mistakes Lab Techs Make

Pharmacy

Upskilling and Reskilling in Pharmacy

Insurance Basics

How Can I Reduce My Professional Liability Insurance Cost?

Healthcare

Is Administrative Staff Covered by Medical Malpractice Insurance?

Mental Health

What Can Happen if a Clinical Counselor Doesn’t Carry Malpractice Insurance?

Mental Health

Mental Health Technicians Are More Important Than Ever in 2021

Mental Health

Why Every Counselor Should Have Malpractice Insurance (Even If You’re Just Starting Out)

Consultants

Five Reasons Why Marketing Consultants Need Insurance

Speech Therapist

Speech Therapist Insurance: What Do You Need to Cover?

Insurance Basics

General Liability and Workers’ Comp: What’s the difference?

Event Planning

What You Need to Know About Planning Your Comeback Event

Event Planning

Top Tech Tools for Hosting a Hybrid Event

Mental Health

Are You at Risk? Four Potential Liabilities When You’re an Uninsured Drug Counselor

Consultants

Consulting in the Tech Field? This is the Insurance Coverage You Need

Event Planning

How to Use Virtual Reality for Your Hybrid Event

News

Bold Penguin and NOW Insurance Partner to Make Professional Liability Insurance Easier to Quote and Bind

News

Matt Higgins Joins NOW Insurance as Executive VP of Engineering

Event Planning

Planning a Conference? You Need Event Insurance

Consultants

Five Steps to Buying Consultant Business Insurance

Nurses

Nursing Board Discipline: Know the Process

Event Planning

Eight Things Commonly Forgotten by Event Planners

Event Planning

Hybrid Events Are the New Norm – What Should Event Planners Know?

General

How Much Is Professional Liability Insurance? 6 Factors That Affect Price

Mental Health

Providing Peace of Mind: Insurance for Mental Health Workers

Mental Health

7 Reasons Rehabilitation Counselors Should Get Malpractice Insurance

Pharmacy

Pharmacy Technician: What’s Next?

Consultants

Common Mistakes When Starting a Consulting Business

Mental Health

8 Reasons a Family Counselor Should Be Insured

Mental Health

Professional Liability Insurance for Mental Health Technicians: What Does It Cover?

News

NOW Insurance Partners with Hiscox on Medical Malpractice Insurance

Healthcare

What to Know About Multi-State Healthcare Licensure

Healthcare

6 Risks of Being a Substance Abuse Counselor Without Malpractice Insurance

Healthcare

What Are the Best Upskilling Opportunities in Healthcare?

Healthcare

How Virtual Care Expands Access to Specialists

General

Thinking of Becoming a Therapist? 5 Things to Know

Healthcare

Do School Counselors Need Their Own Insurance Policy?

Healthcare

5 Rewards of Being a Mental Health Technician

Home Health

What are Key Compliance Issues in Home Healthcare?

Home Health

The Home Hospital: What Is It and How Will It Affect Future Care?

Healthcare

What Challenges Should School Counselors Expect as Schools Reopen?

Pharmacy

Sharing the Workload: Questions You Can Ask Your Pharmacist Instead of Your Doctor

Healthcare

5 Situations Where Testing Labs May Be Legally at Risk

Healthcare

Do Marriage Counselors Need Professional Liability Insurance?

Healthcare

8 Malpractice Insurance Terms Every Medical Professional Should Know

Healthcare

Social Worker Insurance: Do I Need My Own Coverage?

Mental Health

Pandemic Pressures Drive Increased Need for Mental Health Technicians

Nurses

Celebrate National Student Nurse Day on May 8

Nurses

National Nurses Week: Celebrate May 6-12

Healthcare

Why Nursing Students Need their Own Professional Liability Policy

Home Health

How to Find Affordable Professional Liability Insurance for Home Health Providers

Healthcare

5 Benefits to a Career as a Pharmacy Technician

Healthcare

How Digital Pharmacies Will Change the Industry

Healthcare

How to Become A Pharmacy Technician

Healthcare

Supporting Providers in the Age of Telehealth

Healthcare

12 Keys to Finding the Best Physical Therapist Insurance

Healthcare

When Are Lab Technicians Liable? Five Reasons to Carry Professional Liability Insurance

Healthcare

What Is and Isn’t Covered by Malpractice Insurance?

Healthcare

Why COVID Testing Labs Should Carry General Liability Insurance

Healthcare

Do Occupational Therapists Need Malpractice Insurance?

Healthcare

Can Lab Technicians Be Sued for Malpractice?

Cyber

5 Reasons Cyber Security Insurance Is Becoming More Important Than Ever

Healthcare

What Sort of Insurance Will Cover Physical Therapists?

Cyber

Helping Hesitant Patients Embrace Telehealth

Cyber

Why COVID Testing Labs Should Have Cyber Security Insurance in Case of a Data Breach

Nurses

GI Nurses and Associates Week: Highlight A GI Nurse Hero March 21-27

Nurses

What Malpractice Risks Do GI Nurses Face?

Nurses

What Kind of Nurse Should You Be? Check Out the Growing Field of Gastroenterology

Healthcare

6 Risks Lab Technicians Face Without Professional Liability Insurance

Healthcare

Do Contact Tracers Need to Protect Themselves with Professional Liability Insurance?

Cyber

Telehealth Rules Relaxed During Pandemic

Cyber

Telehealth is More Than Just Video Appointments

Healthcare

Pharmacists: Which Specialty Is Right for You?

Healthcare

Sued for Malpractice: A Guide for Nurses and NPs

Healthcare

A Guide to Medical Director Insurance and the Costs

Healthcare

2021 Trends to Look for in Occupational Therapy

Healthcare

Become a COVID-19 Contact Tracer

Healthcare

How Much Does Physician Assistant Malpractice Insurance Cost?

Healthcare

Lab Technicians: Is a Travel Job Right for You?

Home Health

Why Your Agency Needs Home Healthcare Insurance

Lab Technician

Covering Covid-19: Is Your Medical Laboratory at Risk?

Healthcare

A Complete Guide to Insurance for Physical Therapists

Healthcare

The Costs of Medical Staffing Agency Insurance

Home Health

Why Start a Non-medical Home Care Business

Healthcare

IV Nurse Day: Celebrate Jan 25

Healthcare

How to Become an IV Nurse

Healthcare

Charting by Exception: Errors by Omission or The Efficient New Norm?

Healthcare

Are You a Culturally Competent Nurse?

Healthcare

Risks of Abbreviations in Nurse Charting

Home Health

A Guide to Starting a Home Healthcare Business

Nurses

Nurses and The Good Samaritan Law

Cyber

Cyber Liability and HIPAA Compliance

Cyber

Why Hackers Love Healthcare Data

Cyber

Ransomware Rampant in Among Small Businesses

Cyber

What is the cost of a data breach?

General

NOW Insurance closes $2.5 million seed round, enhances AI-enabled platform

Cyber

Cost of a HIPAA Violation

Cyber

How to Create a Small Business Cyber Security Plan

Cyber

Small Business and Cloud Storage: Is Your Data Secure?

Cyber

Social Engineering: 7 Common Red Flags

Event Planning

Getting Liability Insurance for Events

Event Planning

Starting an Event Planning Business: A to Z

Event Planning

How Much Does Event Planning Insurance Cost?

Event Planning

Insurance for Event Planners: What You Need to Know

Event Planning

What’s Included in Event Planning Insurance Coverage?

Insurance Basics

What Can a Tax Preparer Be Held Liable For?

Insurance Basics

Tax Preparer Insurance 101

Medical Staffing

4 Nurse Staffing Issues to Avoid

General

What You Need to Know to Be a Tax Preparer

Insurance Basics

Insurance for Bookkeepers: A Complete Guide

Medical Staffing

How to Start a Nurse Staffing Agency

Insurance Basics

What is Liability Insurance for Bookkeepers?

General

How to Build Customer Relations in Your Business

Medical Staffing

A Guide to Medical Staffing Insurance

General

Developing an Effective Risk Management Plan

Insurance Basics

All You Need to Know About Therapist Insurance

Mental Health

What is Malpractice Insurance for Counselors?

Mental Health

Benefits of Therapist Liability Insurance

Insurance Basics

What’s the Average Counselor Malpractice Insurance Cost?

Insurance Basics

Risk and Hazards of Being a Massage Therapist

Insurance Basics

Do Nutritionists Need Insurance?

Insurance Basics

What’s Included In Massage Insurance Coverage?

Insurance Basics

Everything You Need to Know About Malpractice Insurance Coverage For Nutritionists

Insurance Basics

Do Massage Centers Need Insurance?

Insurance Basics

How Much Does Nutritionist Insurance Cost?

Insurance Basics

Insurance Plans For Nutritionists: Everything You Need to Know

Insurance Basics

Massage Therapy Insurance: A Beginner’s Guide

General

Coronavirus Outbreak: 3 Tips to Keep Your Healthcare Business Safe

General

Company Working From Home? Stay Safe of Cyber Attacks

Insurance Basics

Business Interruption Insurance and Coronavirus

General

4 Best Practices for Medical Workers During the COVID-19 Outbreak

Insurance Basics

Inside the Hacker’s Mind – Social Engineering

Insurance Basics

Do Consultants Need Insurance?

Insurance Basics

Fitness Center & Gym Insurance: A Beginner’s Guide

General

Should Your Company Work From Home During the Coronavirus Outbreak

Insurance Basics

Why Your Business Needs Wellness and Fitness Insurance: A Comprehensive Guide

Insurance Basics

What Is the Cost of Gym Insurance?

Insurance Basics

What Insurance Do Consultants Need?

Consultants

How Much Is Insurance For a Consultant?

Consultants

Benefits of Consulting Insurance Coverage

Healthcare

Pay as You Go Insurance for Healthcare Professionals

General

You Have Your Physician Assistant’s License: Now What?

Healthcare

Why Are You Still Buying Occurrence Malpractice Coverage?

Healthcare

What Does Malpractice Insurance Cost?

General

Physician Assistant Malpractice Coverage: A Practical Guide

Nurses

Do Student Nurses Need Malpractice Insurance?

Nurses

Ouch, You Hurt Me! Do Nurse Practitioners Need Their Own Malpractice Policy?

Nurses

What Type of Insurance Do Nurses Need?

Insurance Basics

Understanding Insurance Terms: Back to Basics

General

What Does Professional Liability Insurance Cover?

General

Types of Insurance Available for Small Business Owners

General

Potential Small Business Risks

General

General Liability Insurance: How to Keep your Business Protected

General

Choosing a Business Insurance Provider: Everything You Need to Know

General

Business Insurance Plans – Do I Need One?

General

Benefits of Professional Liability Insurance

General

What Is the Average Cost of Errors and Omissions Insurance?

General

What Is Cyber Liability Insurance?

General

What Does Errors and Omissions Insurance Cover?

Cyber

Cyber Insurance 101: Why You Need It

Cyber

What Does a Cyber Liability Policy Cover?

General

Errors and Omissions Coverage: What Is It & How Does it Work?

Cyber

What Is the Average Cost of Cyber Liability Insurance?

General

Who Needs Errors and Omissions Coverage?