What Is Cyber Security and Why Is it Important?
Cyber Security is considered the #1 most misunderstood commercial line of insurance coverage today. This becomes even more important since cyber hacks and breaches are becoming more and more prevalent. According to Cybint, a hacker appears every 39 seconds, and 43% of those cyber attacks are attempting to target all kinds of small businesses. To take things one step further, six months after a successful breach, most small businesses fail to keep their doors open for business. While many are unaware of the rising prevalence of cyber attacks, they are even less aware of the costs that can be mitigated by proper cyber liability coverage.
What Is Cyber Liability Insurance?
Cyber security is the general liability that lies within the digital realm. Cyber liability insurance covers the financial losses that result from any breach of data that results from a cyber attack. Attackers look for anywhere that a business that is exposed including areas such as:
- Landing pages that ask for personal information;
- Name
- Address
- Date of birth
- Phone numbers
- Social security numbers
- Storage files;
- Employee information
- Customer information
- Business records
- Access into website domain controls.
What Does Cyber Liability Insurance Cover?
While most individuals think that their general liability insurance will cover cyber-related misfortunes, this is not the case. General liability insurance only covers bodily and property damage that may result from your products or services, leaving all cyber breaches unprotected. Like any type of insurance, the type of coverage is agreed upon between the broker, and the individual receiving coverage. While some large businesses may need extra coverage to fully cover the organization and all the facets surrounding the organization, a small business may not require as much. Some organizations need a lot of coverage, some need minimal, but all need some. Cyber liability insurance can be split into two main types of coverages: first-party liability coverages and third-party liability coverages.
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First-Party Liability Coverages
Traditionally, cyber liability insurance policies cover various property, crime, and costs associated. First-party liability insurance covers the following:
- Loss/damage to any electronic data;
- Loss of income;
- Extorsion losses;
- Notification costs.
Third-Party Liability Coverages
While it is important to have any sort of coverage within cyber liability insurance, most cyber liability insurance policies include both types of coverages. Third-party liability insurance covers the following:
- Network security liability;
- Network privacy liability;
- Electronic media liability;
- Errors and omissions liability.
Cyber Liability Insurance Coverage at KBG
While the coverage received depends on a variety of agreed upon things, at KBG, cyber liability insurance coverage is typically as follows:
- Privacy Liability;
- Covers the cost associated with a breach for defense and indemnity.
- Regulatory Coverage;
- Covers fines and penalties from state and federal agencies including HIPAA.
- Security Breach Response;
- Covers breach response costs associated with: IT forensics, notifications, PR firm, credit monitoring etc.
- Security Liability;
- Suits and costs that arise due to distribution of malicious code.
- Media Liability;
- Coverage applies to your media material for matters such as: copyright infringement, liable, stand, etc.
- Cyber Extortion;
- Coverage for the extorted funds, and the costs associated with securing the network.
- Business Income/Digital Restoration;
- Reimbursement for the revenue that was lost due to business downtime, and the restoration of digital records.
- Payment Card Industry Assessments (PCI).
- PCI fines, penalties, and assessments for loss of credit card information.
Here at KBG we utilize the same cyber liability protections as listed above, and recommend that you do too. Check your current business owners policy to know if you have data breach coverage or cyber liability coverage. There is a big difference between these coverages. A data breach is about losing information that you are responsible for and cyber liability is about causing a cyber incident for an outside party.
Calculating Insurance Rates, Cost, and Provider
The rate and cost depends intrinsically on the type of business that leads to what types of coverage are needed. When these two factors are understood, the rate and cost depend on the provider you choose. Your provider is arguably as important as the coverage you are considering because the two factors are entirely related. Having yearly reviews on your current insurance policies are an important aspect of your relationship with your current agent. Contact your current agent today to ask if you are covered from this type of risk. Here at KBG Insurance & Financial, we are dedicated to customer satisfaction and creating lifelong personal relationships. For business insurance quotes — as well as other types of insurance — click here.