If your company collects payments or stores personal information about customers, you have to take steps to protect against cyber crimes. Even small businesses can be vulnerable to such attacks on their data. To make sure you’re properly protected, include cyber liability coverage in your business insurance plan. Below are answers to a few common questions business owners have about this type of coverage and why it’s necessary.

What to Know About Cyber Liability Business Insurance 

What is cyber liability insurance?

Cyber liability insurance is designed to cover security breaches that arise due to the unauthorized access or use of electronic data or software within a business or network. It helps fill any coverage gaps present in general and professional liability policies to cover incidents that occur from hacking, employee theft, loss of equipment, deception to obtain data, and unintentional exposure of data online.

Why does my business need cyber liability insurance?

With the rise of cyber threats, this coverage should be considered an essential part of your company’s risk management strategy. It will help maintain your organization’s privacy and network security as well as avoid the costs related to data breaches. According to a study conducted by the Ponemon Institute, the average cost of a breach as of 2018 is $3.86 million. 

What does cyber liability insurance cover?

This kind of business insurance covers a variety of cyber events and helps mitigate the impact of both first-party and third-party losses. Examples of first-party coverage include forensic investigations, computer and data replacement or restoration, business interruption, victim notification and credit monitoring, electronic theft and fraud, as well as cyber extortion demands. Third-party coverage includes legal fees and settlements or judgments resulting from a lawsuit.

Are businesses required to carry this coverage?

There are currently no laws that require companies to carry cyber liability business insurance, but it’s strongly encouraged as a way of demonstrating effective security risk management. As criminals find new ways to exploit technologies, organizations will only see their exposure to risk steadily increase.  

If you’re looking for quality cyber liability coverage you can rely on, turn to Patton Insurance Group. As an independent agency, they have access to a wide range of business insurance options from many reputable carriers. Their team of experienced agents will carefully assess the risk you face and identify the right solution for your needs. Over the last decade, they have helped entrepreneurs throughout southern Montgomery and northern Warren County, OH, safeguard their operations. Call (937) 886-9966 to request a quote, or visit their website to learn more about the products they offer.