Does My Business Need Cyber Liability Insurance?

(Get all your answers from an expert and find the coverage you need.)

Q: What is cyber liability insurance? 

Does my business need cyber liability insurance? Are cyber attacks covered under my business insurance?

I am a small business owner and I have had the same business insurance for the last ten years. I am now starting to hear a lot about cyber liability insurance, which is something I never heard of before. What is this exactly, and does my business need it? Doesn’t my currently policy already protect me against attacks by hackers?


A: Cyber liability insurance is an interesting new insurance coverage that has only been around for a few years. These policies are designed to protect your business from cyber crimes, including breaches of confidentiality with customer information, loss of data, electronic theft, loss of income due to temporary suspension of business practices, and other related losses. 

Whether or not your business needs this type of coverage depends on what your business does, and what types of data you store electronically. Do you keep medical records, personal information, credit card numbers or any other data that could damage your customers personally or financially if it got in the wrong hands? 

If so, you need cyber liability coverage. Would your business be able to continue to operate normally if your computer system were shut down due to a cyber-attack? If not, you probably need cyber liability coverage. 

Cyber liability insurance may provide several different types of coverage, such as: 

  • Loss of income because of suspended or limited operations 
  • Loss of income because of a damaged reputation 
  • Reparations to customers or third-party vendors who suffered a financial loss due to a breach at your company 
  • Reparations to customers who suffered emotional distress due to a breach at your company 
  • The cost of expert programmers hired to find and fix the problem by patching up security holes 
  • The cost of credit-monitoring programs for customers who had personal and financial data stolen 

One important thing to keep in mind is that, because it is so new, cyber liability insurance currently has no coverage standards, so not everything listed above will be included with all policies. There are vast differences between cyber liability insurance policies offered by various companies. If you are planning to purchase a policy, it is crucial that you have a skilled business insurance agent, such as those in our network, who can help you evaluate what is out there and determine which policies are a good fit for your company.

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