Cyber liability insurance is a new type of insurance that has rapidly become popular. In the new era, it's very common that businesses of all sizes and all industries will experience a data loss or cyber security breach. Cyber liability insurance is designed to protect from the financial consequences of this type of issue. Because of this, it covers a variety of different expenses. If you are a business owner and would like to learn more about this type of coverage, read on.
Business Interruption Due to Cyber Security Breach
Many businesses today rely upon their data. When their data isn't available, they can't do safely or reliably do business. If a cyber breach occurs, a company could potentially find itself missing out on many days of income. This isn't even counting the lost income they will experience subsequently, as customers may be wary of working with them. A cyber security policy will often cover lost income for the days that the business is not able to operate.
The Liability Costs Associated With a Data Breach
Companies often have to pay hefty liability costs when their data is breached. When a company's data is breached, the personally identifiable or confidential information of its clients are often compromised. As a consequence, the business will need to pay for notifications, credit monitoring costs, and any financial issues that result because of the breach. Identity theft is the largest potential issue when it comes to data breach attacks, and it can affect many of the customers that were compromised.
Data Recovery Costs Following a Data Loss
Cyber security issues don't just occur because of malicious attackers. Data can also be lost either through equipment failure or through the mistakes of an employee. When data is lost, it will usually need to be recovered -- and recovery can be very expensive. A cyber liability policy will often cover the costs associated with this data recovery. Of course, data can also be lost through malicious actions. In particular, "ransomware" has become a popular way for cyber criminals to lock away important data until a ransom is paid. If the business has a copy of its data to recover, the ransomware will be ineffective.
A cyber liability policy is considered to be a critical aspect of insurance for any business that relies upon data. Designed to protect against data loss, data destruction, cyber attacks, fraud, and extortion, cyber liability is becoming even more important with each passing year. This is especially true as businesses begin to integrate cloud services and mobile devices into their networks.