If your business carries out any operations, transactions, or communications online, it may be vulnerable to a cyberattack, data breach, or debilitating software virus. That’s why it’s recommended to not only examine and optimize your business’s cybersecurity best practices, but also consider purchasing a robust cyber insurance policy to help protect your business from significant monetary loss.
Cyberattacks from bad-faith hackers unfortunately aren’t new for businesses to contend with. With the growing sophistication of hackers and influence of artificial intelligence (AI)-powered tools, your online data may be more susceptible than ever to exposure. Just one security breach, no matter its origin, can result in a potentially catastrophic financial loss for your business. So, what is cyber liability insurance and how can it help you financially recover from the encroaching cyber threats that modern technologies and AI can present?
Cyber liability insurance is a type of business insurance coverage that offers financial protection in the event of an electronic data breach, cyberattack, or some other cybersecurity issue. A cyber liability policy generally covers financial losses arising from data breaches, viruses, hacking, denial of service, cyber extortion, and other cyber incidents. Examples of financial losses may include legal fees stemming from civil suits, regulatory fines and penalties, and the cost of mandatory forensic examinations.
Crucially, a cyber liability policy protects your business beyond the basics of a general liability policy, which on its own typically does not protect against the operational, legal, and other costs arising from cyberattacks and data breaches. Instead, cyber liability may be an optional add-on to a Business Owner’s Policy, which includes general liability coverage as well as additional coverages and endorsements.
Furthermore, your business may already have a robust cybersecurity plan to stave off hackers, leaks, and data loss. (And if you don’t have one in place, consider that now!) But sophisticated security infrastructure is not the same as insurance coverage that protects your business’s financials.
