Let’s say you come into work to find that hackers have struck your computers. They have stolen customer credit card data. This is a major exposure of private information, and your company must respond. Yet, when you turn to your liability insurance, you find that you don’t have coverage. That’s because general liability policies usually won’t cover cyber losses. Why is this the case? What can you do instead?
For most cyber losses, you’ll need a insurance called cyber liability coverage. This is coverage that is more specific than a general liability policy. If computers are part of your business, don’t hesitate to add it to your coverage.
Doesn’t general liability insurance cover liabilities like this?
You probably realize that liability insurance covers the damage you cause to others. Because data exposures are damage to customer privacy, you might expect your commercial liability coverage to protect you. After all, the costs of cyber theft might prove massive expenditures. Thus, you’ll likely hope your insurance will help you pay for the damage.
However, not so fast.
Most general liability policies will only cover claims of bodily injury, property damage or advertising injury. The theft of data due to a hack will likely fall well outside the realm of this coverage, therefore. Indeed, many policies often exclude cyber losses from this line of coverage.
Only in a few cases will general liability policies cover cyber losses. For example, if computer damage results in losses, your policy might pay for data recovery. After all, the cause was property damage. Keep in mind, you might need a specialized data rider added to your coverage for these instances.
In cases involving simple virus or hack losses, you likely won’t have protection. For these case, you’ll probably need a cyber liability policy.
What’s Cyber Liability Insurance?
With cyber liability coverage, you’ll likely have much more protection for instances like data theft, ransomware, virus attacks and the like. Coverage might help you pay to:
- Recover lost data and repair damaged computers
- Notify customers of data theft and pay for identity theft monitoring
- Cover regulatory fines and legal fees
Given the sensitivity of data lost, you’ll probably have to start an investigation. All of these processes might prove very expensive. Therefore, the help provided by your cyber liability coverage might be extremely helpful.
Talk to your insurance agent at 708.423.2350 about your use of private data within your business. Often, you might find cyber liability coverage very critical to your reputational management and solvency.