Cyber Liability Insurance

Finding the Best Cyber Liability Insurance

(Because hackers gonna hack)

Greg Lewerer | April 15, 2019

Unless you’re a cash-only 7-11 with lemonade-stand revenue, your business is most likely enjoying the convenience of today’s tech, while at the same time fearing the consequences of hackers.  

These virtual jerks can rob you blind and destroy your business while eating sugar-based cereal in their underpants. 

There are a lot of ways a data breach can happen. If it does (we hope it doesn’t), it’s a wise decision to have a solid game plan and a sweet cyber liability insurance policy to help your company stay alive. Just ask any of our insurance agents.

What Is Cyber Liability Insurance?

To make a long story semi-short, it’s a contract between a business and an insurance company where the insurer will pay for expenses like fees, fines, lost income and PR (depending on coverage) to help the company recover from a number of threats and incidents.

hacker on a computer

Is Cyber Liability Covered by Business Insurance Plans?

The short answer is "No" or “Meh” at best. Traditional policies like professional and general liability have significant gaps in coverage for digital exposures and are often issued with broad exclusions and all kinds of loopholes.

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Why Do I Need Cyber Liability Insurance?

If your company gets hacked, cyber liability insurance can save you from a door-closing disaster in a number of ways, but if you feel like you’re too cool to have adequate coverage, you may find yourself liquidating your assets on Craigslist.

Some bad things that could happen:

  • Deletion/alteration of data, transmission of malicious code, denial of service
  • Loss of private data and/or communications in paper and digital formats
  • Invasion of privacy and/or copyright/trademark violations
average cost for claims

In the event of a breach, one of the biggest things you can lose besides street cred is your customers. It should be no surprise that they’re the reason you’re in business.

lost customers by companies due to cyber attacks chart

Cyber Liability Insurance for Small Businesses

Large companies are not the only targets. Actually, smaller shops are a much tastier option since most don’t have the funds to keep their goodies properly protected. Those who don’t take action to up their security could find themselves out of business after a data breach. Here’s an example of why:

Bad thing that happened: 2,000 client credit card records were exposed

Using the previous studies, this will cost:

  • Investigative costs: $30,600
  • Managing the crisis and reaching out to your customers and the public: $23,850
  • Payment Card Industry – Data Security Standard (PCI-DSS): $29,000
  • State and federal authorities: $2,660

Total cost: $194,390 | Total cost per record: $97

  •  Let’s add in the inevitable, “the attorneys are coming with a class action lawsuit”

Lawsuit cost: $582,160 | Total cost: $784,950 |Total cost per record now: $392 

Guess what that equals? CLOSED DOORS

What Does Cyber Liability Insurance Cover?

A cyber liability insurance policy provides a company with the mighty coverage needed to karate-chop a wide range of nasty threats and incidents that would be classified as breach events. 

cyber liability insurance claims chart

Cyber liability insurance provides coverage for:

  • Privacy Liability: Fills the gaps between state and federal-specific definitions after a data breach
  • Privacy Regulatory Claims: Legal defense expenses, fines and penalties assessed by federal, state and local authorities
  • Security Breach Response: IT forensics, customer notifications, PR and credit monitoring services
  • Security Liability: Addresses the human element and allegations of a “Security Wrongful Act”
  • Multimedia Liability: Defamation, libel, slander, copyright and more
  • Cyber Extortion: Expenses and payments (within limits) to a harmful third party to avert potential damage
  • PCI-DSS Assessment: Compliance assessments and expenses involving cardholder information
  • Cyber Deception Extension: Extensions respond to an intentional or misleading material facts contained or conveyed within an electronic or telephonic communication(s) that are believed to be genuine
  • Business Income and Digital Asset Restoration: Provides for lost business and earnings, expenses and digital-asset restoration costs

How Do I Find Cyber Liability Insurance Quotes?

We have partnered with Risk Placement Services (RPS) to bring you an easier way to get accurate cyber liability insurance quotes in minutes. With this shiny state-of-the-art process, you’re now only four simple questions away from binding coverage up to $100 million in revenue. Get coverage now. Or To find out more information about keeping your business or home private with cyber security, speak with one of our independent agents. Article | Reviewed by Paul Martin
Sources © 2019, Consumer Agent Portal, LLC. All rights reserved.

Reference: from our friends at NetDiligence (2017)

Reference: from our friends at Cisco (2017)

Reference: from our friends at NetDiligence (2017)

© 2019, Consumer Agent Portal, LLC. All rights reserved.

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