If you run a business, you probably already have insurance coverage for threats like theft. A lesser-known—but just as important type of business insurance—is cyber liability insurance. This covers the costs needed to recover your data following data breaches and similar damaging cyber events. Find out more about what it covers and if you need it below.

What Is Cyber Liability Insurance?

Modern technology simplifies business in many ways. Valuable customer data can be stored in the cloud, for example, while payments can be made electronically. Most businesses also save their own data electronically, like tax records, sales projections, and employee's personal details. All this digital info can be lost or infiltrated because of a cyberattack such as a virus, however. When this happens, cyber liability insurance covers the resulting financial losses.

What Does It Cover?

Cyber liability plans can include first-person and third-person coverage. First-person coverage pays for damages directly incurred by the business. This could include costs to restore electronic data, loss of income because of systems being down, and the price of notifying clients about the breach.

Third-party coverage pays for damages other people or businesses experience as a result of the cyberattack on your company. For example, if a hacker steals personal data about a client and posts it online, that client might sue you.

Some of these business insurance plans also include cyber extortion, when a criminal hacker breaks into a system and threatens to damage data if they aren’t paid. Another possible inclusion is the cost of regulatory proceedings, as your business may be fined by regulatory bodies handling data laws.

Do You Need Cyber Liability Insurance?

If your business uses digital technology, cyber liability insurance is a must. All it takes is an employee clicking on a phishing email to have valuable company data breached. You can also take steps to prevent cyber attacks, like having employees change their passwords regularly.

Trust Patton Insurance Group of Springboro, OH, for all of your private and business insurance needs. This independent insurance company offers a comprehensive array of products from trusted national providers, including Progressive® and Safeco®. Their knowledgeable agents will advise you on what items best suit your needs, working with you to secure the lowest rates and most reliable policies. Visit their website for an online insurance quote. If you have questions, call (937) 886-9966.