Cyber Liability Insurance

Cyber liability Insurance addresses the first-party (direct damage) and third-party (liability claims) risks associated with e-business, the internet, networks, and information assets which are not covered by traditional general liability insurance policies.

When a corporate network, connected to the outside world, becomes compromised, the resulting damage can be tremendous. In today’s networking world, damages and security breaches to one computer can potentially lead to meaningful financial losses throughout an entire networking community.

A company’s network carries a unique loss potential. The potential exists for hackers/crackers, viruses and malicious code to cause damage throughout the entire virtual enterprise. The damage to computer systems can also have a dramatic impact on each of your business stakeholders. In either case, the security breach in your system may cause untold damage to others linked to your system who depend on your stability.

There are several types of cyber liability protection most coverages are purchased ‘a la carte’ and incorporated into one policy. The various options include:

This covers the unauthorized acquisition, access, use, physical taking, identity theft, mysterious disappearance, release, distribution or disclosures of personal and corporate info.
This covers the failure to prevent a party from unauthorized access to, use of or tampering with technology, including denial of service attacks.
This covers personal injury claims including the gathering, publication, or dissemination of web-based content.
With this type of policy the costs of notification and investigation of the attack are covered, as are the crisis management expenses and credit monitoring costs.
Extortion payments to a third party related to a technology threat are also covered. This includes the expenses to investigate the extortion and the costs incurred to pay the extortion.
Costs to restore, recover, or replicate data that is damaged by a technology breach.

The marketplace for Cyber Insurance continues to expand, it is important that your company is aware of what you are purchasing as terms of coverage vary widely. You might be able to purchase an endorsement from an existing policy you already have in place in lieu of purchasing a specific cyber liability policy. You need to evaluate your risk and sources of exposure regularly, and make sure your insurance program keeps pace with the risks and realities of today’s business environment.

If your system becomes the point of compromise, you have a responsibility to protect your business stakeholders and customers at all costs.