Personal data such as date of birth, name, credit card information, address, social security number, and health data is extremely sensitive and should be protected at all times. Because of the value of this information, hackers work day and night to steal it. As of 2017, it cost an average of $214 to resolve a single data breach. With the loss of record averaging at about 20,000 in a year, this translates to $420,000, which is quite substantial.
With the cost of commercial cyber insurance in California being as low as $37 per month, getting help from us will leave you worry-free to concentrate on other aspects of your business apart from data security.text in italic
This is a type of insurance that covers liability that comes from non-permitted use or unauthorized access to the software or electronic data that has been used, operated, and stored by a particular company. If you're wondering what is cyber coverage insurance, this basically means insurance that covers the spread of a virus or any form of data theft. Additionally, it is crucial to understand that it also covers omissions, errors, or negligence that is associated with the use of software or data. A good example is when an employee accidentally sends an email containing the personal information of another client; the cyber liability insurance in California is bound to cover the error.
You might be asking yourself what the difference between the traditional type of liability coverage and cyber liability insurance is. In conventional liability insurance, if the policy includes coverage of the business property, it only covers assets that are tangible and not things like data. For example, when you decide to take up a traditional policy, only the loss of a physical document that has resulted from omission, errors, and negligence will be covered. This means that, if the data of a client is lost when it was stored in an electronic database, it will not be covered by this policy.
Network privacy is one of the main items that are covered when you get cyber liability insurance in California. This offers protection in the event that you do not sufficiently protect stored data on your network that belongs to one of your clients or any other member of the public. Normally, such issues arise from leaks and theft of data. Aspects such as network security are covered in this policy. The answer to what is cyber liability coverage, then, is insurance that covers your liability when access to user data is unavailable or when there has been a data breach.
Electronic media coverage is a recent addition to cyber liability insurance, and its benefits are immense. This permits cyber liability to cover cases of slander, defamation, breach of confidentiality, copyright infringement, or invasion of privacy, which has been caused by electronic data that has been published on the web. Social media and all other websites are covered in this policy.
When your company suffers a cyber attack, there are several penalties and costs that are sustained by your business. Some of the costs and penalties that cyber liability insurance will cover include the following.
Suppose, for instance, your company handles the credit card information of many clients, and some of this information is lost to a hacker. In that case, your business could be liable to heavy penalties by the local law enforcement authorities.
Your company is obligated under the merchant services agreement to pay for the investigation costs, the monetary damage caused on the card, and any reassurance costs concerning the credit card. Even for medium and small-sized companies, these fines could amount to thousands of dollars. Luckily, cyber liability insurance can cover the costs and penalties.
Most argue that the most prized asset of a company is its reputation. This is true. It can take several years to build and can be destroyed in seconds, and that is why it should be protected at all costs. In the event that your company is hacked and it leads to reputation harm, depending on the type of information exposed, sales can decrease drastically, leading to huge losses.
Cyber liability insurance is obligated to settle the cost to hire a PR company if need be in order to clear the company’s name and restore its good name to its customers.
Additionally, the insurance company compensates for the losses your company suffered as a result of the cyber-attack. Some of the big companies that have suffered damaging cyber-attacks include Gmail, Sony, and Yahoo. This is a reminder that data breaches can happen to any company irrespective of the resources that they have at their disposal.
It is essential, even for small companies, to invest in this type of insurance as they would not have deep enough pockets to get themselves out of the losses incurred.
Most people think that a data breach causes the business activity of your company to stop temporarily and, hence, should be covered under business interruption insurance. This is not true as physical property damage is the only aspect covered under business interruption. Since data is intangible, we would advise you to purchase cyber liability for compensation during interruptions.
Unlike small and medium-sized companies, large firms usually have a risk department that continually works to mitigate the risks that the company is exposed to. If you own a medium-sized or a small company, signing up for cyber liability insurance would work in your favor as we would assess all risks that are IT-related in order to correctly price your policy. The report from this type of assessment can help you identify the areas you need to improve on concerning your cybersecurity without necessarily having a department specifically handling risk.
There are two types of cyber insurance coverage, first party and third party. For first-party coverages, you are compensated for all the losses that have resulted from a data breach. An excellent example of this is the money that is used to let your customers know that there has been a cyber attack. Third-party coverage, on the other side, covers claims leveled against your company by another company or people as a result of failing to act or causing injury to them. A perfect example of this is when a hacker manages to steal and release online data belonging to your client, and they decide to sue you on the grounds of negligence.
Cyber Extortion: This is a type of coverage that applies when a hacker, after breaking into your network, threatens you to hand over a certain amount of cash against your will. These threats may include damaging data in your network, releasing sensitive information of your company to the public, starting a denial of service attack that would cause the intended users to have little or no service, and introducing a virus into your system. This coverage covers all the money that you pay to the extortionist in order to settle the demands.
Damage or Loss of Electronic Data: In this type of coverage, the cost of restoring or replacing the damaged programs or electronic data is settled by the insurer. This is irrespective of whether the data belonged to somebody else or your company. These losses, however, should be as a result of peril that has been covered by the insurer, like a virus, cyber attack, or denial of service attack. In some instances, this coverage may facilitate the hiring of experts in order to make sure that the data is in good condition for future use.
Cost of Notification: When a data breach has happened, companies are obligated to notify their clients of the incident. This can either be establishing a call center or using other communication platforms. This type of coverage foots all costs regarding this.
Reputation Damage: Also known as crisis management, this coverage pays for all the public relations and marketing that would be required to protect or repair the damage that has been done to the company's reputation.
Cost of Regulatory Proceedings: This coverage sorts any penalty or fine that has been imposed on your company by agencies that regulate laws concerning the breach of data. Additionally, it may also cover legal fees to a lawyer while the proceedings are undergoing.
Liability of Electronic Media: This coverage takes care of lawsuits against you for things like defamation, libel, or copyright infringement. It is important to note that these acts can only be covered when they arise from electronic data publication on the internet.
Privacy Liability and Network Security: Basically, this covers claims that say that you did not sufficiently protect delicate data that was stored in your system. The sensitive data can belong to your clients, customers, other parties, or employees.
The usefulness of cyber liability insurance in California cannot be overemphasized and should be used by all businesses that store client, customer, or any other sort of sensitive information. Feel free to talk to us at CoverWallet for any questions you may have, or ask for cyber liability insurance quotes, and we will get back to you in no time.
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