Cyber Liability Insurance Pennsylvania

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Cyber Liability Insurance in Pennsylvania Should Be a High Priority for Any Small Business

When you start a business, you may start small with the idea to grow. From the moment you have a first customer, sensitive information is stored on your office computers, such as social security and credit card numbers, driver’s license numbers and, in certain cases, medical records. Your customers trust you to keep their information safe from hackers who illegally collect and sell these numbers.

If the data you hold is compromised by a hacker or even if a laptop or smartphone is stolen, you could be sued by your customers for damages. You may also have to replace or restore your computer system, and there will be substantial notification expenses. You can protect your business from the high cost of a data breach with cyber liability insurance in Pennsylvania.

What Does Cyber Insurance Cover in Pennsylvania?

In today’s tech-driven society, sensitive information is shared online and stored by small and large businesses. Hackers may steal your data or block your access to your data in an extortion racket to force you to make large payments. If this happens, your business may also have to pay large fines and legal settlements. You may not be aware of how common data breaches are in Pennsylvania. Almost half of all data breaches are on small businesses.

Data breach cyber insurance is your best protection against the above example. It can cover breaches made by outside hackers or your own employees. You can get coverage for:

  • Cyber extortion

  • Loss of digital assets

  • Non-employee privacy liability

  • Associated security costs

  • Business interruption

  • Electronic media liability

  • Cyber terrorism liability

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What Is Cyber Risk Liability Insurance in Pennsylvania?

With cyber-attacks becoming more sophisticated every day, cyber risk liability insurance covers your expenses if your business is at risk for:

  • Liability for a data breach to customers, other third parties.

  • Repair or replacement of your computer systems.

  • Losses incurred because your business is closed until you get everything back to normal.

  • Customer notification. Notification to customers who are affected by a data breach as quickly as possible is required in Pennsylvania. There are many other laws about stolen customer information. You are required to inform each customer within a certain amount of time after the breach.

  • State and federal fines incurred because your business was hacked and you didn’t have the proper protection in place for your customers' data.

  • Class-action lawsuits filed on behalf of all of your customers.

What Does Cyber Liability Insurance Cover?

If any of the following issues are possible with your business, you need cyber liability insurance. These are not random occurrences; they take place about 2,500 times per day with almost half occurring on small businesses.

A Data Breach

This means your customers' and employees' private information has been stolen or exposed and can be sold to a third party. It could cause serious damage and loss. Insurance would cover most of your expenses related to investigatory costs, legal fees, court fees, fines, notification and the retainment of a PR agency to remove any stigma connected to your business because of the breach.

Illegal or Damaging Internet Advertising

If your business is attacked online by injurious advertising from another business or a hacker, you may incur injury claims. This is not uncommon, especially if you are in a competitive business. Copyright infringement, slander, libel and even defacement of your website could happen.

Network Failure

Network failure is a broad topic as it covers the costs related to several things. You may have damages and a third party may have damages if for any reason you are denied access to your data. Also, if your data is stored by a third party and it is hacked or stolen from them, or their system crashes and your data is lost, you may also be liable.

Extortion Liability

As mentioned above, outside hackers or internal employees may steal your sensitive information. They hold it and require you to pay a ransom to retrieve it. Your insurance will cover the amount you have to pay the criminal as well as any legal fees you incur if you decide to go after the criminals.

Stolen Systems

If one of your business laptops is stolen or goes missing and you cannot find it, you will have two expenses. One is the liability for the possible breach of private information, and the other is to replace the hardware. Your cyber liability insurance coverage will pay these expenses.

Hackers can also damage your hardware if they install viruses or other malware. If you are a healthcare provider or do most of your business transactions online, you will have a lot of expensive hardware that may cost thousands of dollars to replace. You will also have to replace the software and pay the licensing fees again.

Who Needs Cyber Liability Insurance?

One of the best features of cyber liability insurance is that it not only covers your business but also your customers or vendors who are affected by a data breach.

You may need cyber liability insurance if your business:

  • Has online sales that require credit card numbers

  • Stores personal information, including medical records and social security numbers on computers

  • Is located in Pennsylvania where there are mandatory data breach notification laws

  • Regularly uses technology for day-to-day operations

What Does Commercial Cyber Insurance in Pennsylvania Not Cover?

There are certain aspects of a data breach that cyber liability insurance does not cover. These are:

  • The loss of your business’s good reputation

  • The cost of improving your systems to prevent a breach

  • The loss of your intellectual property

  • The loss of future income that is the result of the breach

If your business uses the internet to advise, whether it is medical or technical, you may need Errors and Omissions (E&O) insurance along with your normal cyber liability insurance. Also called professional liability insurance, it covers you from lawsuits that claim you made a mistake in your professional services. This is not included in normal cyber insurance policies.

What Is the Cost of Data Breach Cyber Insurance?

You can combine your cyber liability insurance with your Business Owner’s Policy and create a bundle that may reduce the cost. If you do choose to purchase it separately, you need to consider a few things before you select the kind you want. This will also help determine the cost.

The size of your business is an important consideration because, if you have a large list of customers, you may be more attractive to hackers. The kind of business you have is another factor. For example, if you provide healthcare, you will also have client’s medical records. Extortionists often look for medical records because they can be held for ransom.

Cybercriminals hack into your servers and encrypt the medical records so that neither you nor the patient can access them. They also encrypt your backup, so you are completely cut off. Once they have done this, they demand a huge ransom. If you don’t pay, they will destroy all the records.

You should also consider how much online exposure your business has. Are you on the first page of Google, or is your website linked to many other websites with whom you have a mutual benefit? It’s a good marketing strategy to be easily seen online, but it could also invite unwanted attention.

You can always choose what type of coverage you want. You can even have someone take the whole problem off your hands and handle your claims from the very start to the final result. If you implement security controls that help reduce the risk of a cyber-attack, your cyber liability insurance costs could be reduced.

Prevention tactics may also help, such as having a regular backup system to a secure offsite location. It is a good idea to develop, follow and publicly post a data privacy policy. This is found on most websites, so don’t forget to include it on yours. You can get advanced security software that guards against certain types of attacks. You can also hire a security company to keep your data safe. As with auto insurance, your costs reduce for every year you do not have a claim. This is a good incentive for setting up your own security.

If your employees often work from home, you can install a virtual private network (VPN) that they can use to access company servers for information.

Purchasing cyber liability insurance in Pennsylvania should be one of your first considerations when running a small online business. Even if you have a brick-and-mortar store, you will communicate with customers online and have a website. The longer you wait, the higher the risk. Get a free appointment with our insurance experts by calling us or scheduling an appointment online. You can ask questions and learn the best cyber liability coverage for your business.

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