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Cyber Liability Insurance in PA

Baby on computer researching Cyber Liability insurance

What Is Cyber Liability?

Most notably, but not exclusively, cyber and privacy policies cover a business’ liability for a data breach in which the firm’s customers’ personal information, such as Social Security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the firm’s electronic network.

Why Do I Need It?

Cyber hacking is big business, and no one is safe; not individuals, not small businesses and not large corporations. All of your data including the names of your customers, their contact information and the social security numbers of your employees are valuable information to a cyber-hacker. Unfortunately, your business and standard property insurance does not cover this, but cyber liability insurance does.

Even a business interruption insurance policy will not come to your rescue if your systems fail because of a spiteful employee, computer virus or a hack attack. Identity theft, telephone hacking, and phishing scams are very real possibilities and not covered by traditional business interruption policies. Cyber insurance may cover the loss of profits because of a system outage that is caused by a non-physical danger such as a virus or attack.

You can be held liable if you lose your third party data. If you offer non-disclosure agreements and commercial contracts that contain warranties about security – and your data is breached – you could have expensive damage claims.

Feel free to use our scene explorer tool, or continue reading below, to discover opportunities that Cyber Liability Insurance could protect you in everyday life.

 

Cyber Liability Coverage

The Internet has spun a whole new web of liability exposures. E-commerce, social networking, cloud storage, and other technologies bring great benefits to large and small businesses alike. But with these benefits also come challenges, including protection of privacy, data, and financial information of your customers. If this information is lost, stolen, or compromised, your company is at risk. In fact, you may even be required by law to alert those impacted by the breach and to pay for any financial loss incurred.

Cyber liability coverage offers protection due to unauthorized access of electronic data or software within your network. It also provides coverage for spreading a virus, computer theft, extortion, or any unintentional act, mistake, error, or omission made by an employee. This coverage is quickly becoming more and more important as you embrace technology to help run your business.

Ransom Coverage

If hackers gain control of critical systems, they may demand a ransom be paid to avoid additional consequences. Sometimes these can be empty threats, but it’s impossible to know for sure. Paying the ransom can be costly. Taking a chance by choosing not to pay can sometimes put a company out of business.

Coverage for ransom and cyber extortion can be included in cyber liability policies and can help cover the cost of ransom to regain control of network systems. This is often not included in a standard policy, may include a separate sublimit and deductible, and may require adherence to certain conditions set forth by the insurer.

Regulatory Claim Coverage

If your business experiences a data breach or violation of confidential information during regular business operations, you may be found in violation of state or federal privacy laws and be required to pay fines for the violations or other regulatory issues.

You may be eligible for regulatory claim coverage which would offer protection in response to proceedings related to state disclosure laws and other governmental actions that can result in defense costs, fines and/or penalties. Coverage does vary and may be restricted by state law.

First-Party Coverage

If your company is faced with a data breach or cyber-attack, you may be forced to cover breach-related expenses such as crisis management, hiring a public relations firm to manage a data breach incident, costs associated with forensic analysis, the cost of repairing and restoring computer systems if there is a virus that destroys business software and data, and the loss of business income resulting from a data breach.

First-party coverage will insure your business for losses to your own data or lost income or for other harm to your business resulting from a data breach or cyber-attack. This coverage will pay you for things like business interruption, the cost of notifying customers of a breach, and even the expense of hiring a public relations firm to repair any damage done to your image as a result of a cyber-attack. Having this funding available in the event of a crippling hack can keep the lights on till you’re able to resume your

Third-Party Coverage

If your business handles sensitive customer data (such as email lists, credit card records or other files), data breaches pose a serious threat to your financial stability. A lawsuit resulting from a data breach means your business is responsible for paying legal fees, court-ordered judgments or settlements and other court-related costs.

Third-party coverage protects you in the event of a lawsuit brought by a customer or partner for a data breach that your business’ actions or negligence allowed.

Business Income

What would you do if an email virus impacted the operation of your database and prevented you from serving clients for a day or more? Or what if a hacker or cyber-criminal caused a system outage or extended downtime, leaving your business inoperable? These and other events can destroy your ability to serve clients and bring in revenue, which can have a major long-term impact on the viability of your business.

Business interruption insurance compensates you for lost income if your company cannot operate as normal due to disaster-related damage that is covered under your commercial property insurance policy, such as data breach or cyber-attack. Business income insurance covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.