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Eight Facts You Need to Know about Cyber Liability Insurance

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HeartbleedThe Heartbleed bug was in the news recently. It allows anyone on the Internet to read the memory of the systems protected by the vulnerable versions of the OpenSSL software. This allows attackers to eavesdrop on communications, steal data directly from the services and users and to impersonate services and users.

The Heartbleed bug put many consumers’ user names and passwords at risk.

If you are a business you are liable for your customer’s information. That is when you need Cyber Liability Insurance.

Below are some important facts about cyber liability insurance that you need to know: 

1) Cyber liability insurance (CLI) is an innovative kind of insurance uniquely suited to address the digital era we live in, and the increasing risks and exposures confronted daily by businesses which operate online, or maintain sensitive client and customer data on their computer operating systems.

2) Whether you own and operate a large or small business, CLI policies can be tailored to meet the specific needs of your business, and can include one or more of these coverages:

  • Security and privacy liability
  • Privacy breach response costs, customer notification and support and credit monitoring expense
  • Privacy regulatory defense and penalties
  • Regulatory claim & audit expenses
  • Cyber terrorism & cyber extortion
  • Multimedia liability
  • Network asset protection

3)  Most general liability insurances do not provide any coverage for cyber liability risks and exposures. While some business policies include limited cyber liability coverage, it is usually insufficient to provide adequate/comprehensive protection.

4)  Any business which operates a website, conducts transactions online, or stores personally identifiable information of its customers, clients and employees, such as birth dates, Social Security Numbers, credit card numbers and bank account information needs CLI.

5)  Your business has a legal obligation to protect the confidential and personal information of your customers, clients and employees, which is stored on your network.  Even if you hire a third party to provide protection and security, you remain liable for any security breach of your network.

6)  CLI can provide coverage for business interruption if your computer system goes down due to a virus, and defense coverage if you accidentally transmit a virus to a third party. Remember, every policy is different.

7)  Storing credit card information on your computer network creates exposure, as it is subject to being either lost or stolen. Accepting online payment by a credit card is a definite cyber liability threat.

8) If a laptop or flash drive with personal/confidential information is lost or stolen, your business liable. It is your responsibility to store customer, client and employee data securely.

How do you know if Cyber Liability Insurance is right for your business? 

Making such a decision about your options is yours — and yours alone under the law. As your independent insurance agent, we can explain these options. Our agency’s job is to help provide you with information, so you can make informed decisions.

Contact one of our agents today and discuss your options. 

Leave a comment below on how you are affected by viruses and bugs. How do you protect your computer and personal information?

~Cheryl Pastor, Social Media Specialist

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