Cyber Liability Insurance 101: Why Is It Needed?

To say that technology plays an important role in running businesses and reaching customers would be an understatement.

Dependency on computerized systems makes businesses vulnerable to cyber attacks. Cyber attacks are launched by criminals, filthy competitors, hackers that intend to capture and run your business, insiders, and other states.

These attacks result in small and big enterprises bearing medium to large scale losses.

In order to save the organizations from falling, it is important for business owners to know about such risks, ways to deal with them, and ideas to deal with and recover from cyber attacks.

Cyber Liability Insurance

Cyber coverage was introduced 20 years back and was initially named as Errors and Omissions Insurance (E&O).

Cyber liability insurance is an insurance policy which protects organizations from cyber attacks. In cases, where there is a cyber attack, this policy helps the said organization recover its data which they may have lost.

Also referred to as cyber risk insurance or cyber liability insurance coverage (CLIC), a cyber insurance policy is meant to alleviate costs or losses that come in an event of cyber breach or similar activity.

Costs Attached to Cyber Breach or Attack

Major costs that cyber attacks bring to businesses include:

  • Investigation of the attack
  • Business interruption (loss of profits while your business network is down)
  • Cost of communicating the breach through notices
  • Fee for legal advice
  • Credit monitoring offered to the customers
  • Damages
  • Cost of dealing with regulatory authorities
  • Bank liability for reissuance of bank card etc.

Reasons Why You Should Get CLIC

It may sound big and costly at first, but cyber coverage is easy to avail and comes with several benefits for you and your business. Five important reasons you should get cyber coverage are:

  • General Insurance Does Not Cover You for Cyber Attacks

A typical policy that covers you for liabilities does not cover you for liabilities that linked with cyber attacks. A cyber policy covers all your office mobiles, computers, laptops, and other computerized machines to give you full protection.

2.It is Affordable

Cyber insurance policies are affordable. They mostly have low yearly premiums and can be tailored according to your company size and needs.

Since it is a new concept, the policies in this type of insurance may vary from one insurance company to another.

3.It Covers Business Interruption

While on one hand cyber coverage protects you from bearing other costs, it also compensates you for the loss of profits when your business is interrupted due to a cyber attack or breach.

This way you do not have to worry about going bankrupt or having negative balances in the financial reports.

4.You Don’t Need a Risk Management Team

If you have CLIC for your business, you do not really need a risk management team. The provider will take steps to make sure your business is protected by checking it for firewall, having social media policies implemented and more.

5.Complete Data Protection

Even if the data including contracts and other confidential documents involving external parties is stored in the cloud, you will be considered legally responsible for it.

CLIC protects you even if your cloud data is lost or harmed.

Get the peace of your mind back; apply for cyber coverage