Cyber liability insurance won’t prevent a hack, but it will help you recover from one. There are two main types:
• First-party coverage, which responds to a loss resulting from a cyberattack on your business network
• Third-party coverage, which responds to cyberattacks on others’ systems or networks
Coverage Highlights in a cyber liability policy.
• States have data breach notification laws that require companies to tell clients about a breach.
Free credit monitoring
• Services can cost $10 to $30 per month per individual. Most states require businesses to provide it for a year.
State and federal penalties
• You might be fined if you are found liable for a breach.
Legal defense costs
• You’ll need to mount a defense if a client sues you for exposing their data.
Cost to repair damages
• You’ll need tech expertise to rebuild your computer systems and networks.
• An expert can help by removing emotions from the process and negotiating a payment reduction.
• Some policies reimburse ransom payments, but the conversation around ransom payments is changing. Make sure you understand the exclusions.
Data breach due to stolen property
• Cyber liability won’t cover the cost to replace a laptop or other device (that’s property insurance), but it will respond to the data exposed due to the theft.