Any business that operates online and collects confidential data should consider cyber liability insurance. You never know where hackers will strike next, as their targets have broadened to all businesses with valuable data. Here’s a brief look at what cyber liability insurance can do for your business.
What Cyber Liability Insurance Covers
- Forensic Expenses:
This involves hiring cybersecurity experts to investigate a breach and how it happened. You’ll also learn about which data was breached. This information will be critical if the breach ends up in court.
- Legal Expenses:
Your cyber liability insurance covers legal expenses related to cybersecurity breaches. An attorney will be needed to review federal and state notification requirement breaches. A lawsuit of this nature can cost a considerable amount of money out of your pocket if you don’t have the right insurance coverage in place.
- Notification Expenses:
After your data has been compromised by a cyberattack, you’ll be required to notify customers, investors, partners, and other parties that were affected. The cost of this process may include paper and postage or hiring a call center.
- Fines and Penalties:
Your firm may face government fines and penalties, especially if you did not take proper precautions to reduce the threat of an attack. Various cyber laws already exist for certain industries, such as healthcare, in which hospitals must follow HIPAA requirements. Firms that deal with private financial information must meet Gramm-Leach-Bliley Act (GLBA) requirements.
- Credit Monitoring and ID Theft Repair:
Although you are not legally required to offer credit monitoring and ID theft repair to parties affected by your breach, it helps reduce some of the friction with victims whose confidential data was compromised. This service can be expensive when you are responsible for a long list of identity theft victims, but cyber liability insurance covers it.
- Public Relations Expenses:
When a company’s reputation has been damaged by a cybersecurity breach, it may need to pay a public relations firm to do image repair work through media. This cost can be very expensive, especially for high-profile global companies. Nonetheless, your cyber liability insurance will pay for it.
- Liability and Defense Costs:
If one of the victims decides to file a class-action lawsuit due to your firm’s cybersecurity breach, it can run up high defense attorney costs. You will be taking a significant risk if you don’t get cyber liability insurance, which will cover your liability costs, including settlements. These days, any company can get attacked if the hacker is skillful and determined. So cyber liability insurance guards against potential overnight business collapse.
It’s imperative to understand cyber liability insurance and how it protects your business from lawsuits resulting from security breaches. Contact our experts at CF&P Insurance Brokers to learn more about how to protect your digital assets.