What is cyber liability insurance?
Cyber liability insurance protects your business from financial losses, disruption and reputation damage. It protects you when there is a system failure or your IT system is under attack. Some insurers may refer to this coverage as simply cyber insurance or:
- Cyber security insurance
- Cyber risk insurance
- Cyber crime insurance
Whether you are a corporation, regional enterprise, local or home-based business, online digital threats are very real.
If criminals hack your network, hold your website hostage, or steal confidential information, you’re liable. You will have to pay recovery costs. You are in danger of legal action from other affected parties - customers, clients, and business partners.
It can be confusing for organizations to understand the type of protection they require. Our commercial insurance brokers work with you to explain the threats to your business. We’ll help you get a policy to protect your company from these vulnerabilities.
Does your business need cyber insurance?
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Any small business could be the victim of an online attack. Not just businesses in the IT field. Cyber insurance has become a necessary requirement if you handle sensitive information. You need coverage if you use a computer or point-of-sale devices, store customer data, or use the cloud. You’ll need coverage if you handle :
- Payment information (credit card numbers, bank account information)
- Customer information (name, email, phone, address)
- Medical records
- Financial records
- Government documentation (SIN, driver’s license, health card numbers)
- Business and trade secrets
Do you store any of this information in digital format? Do you house it on an internal database or server? If you use computers to run your business, you are exposed. Standard commercial general liability insurance does not cover cyber threats.
Cyber insurance will protect you if compromised
Cyber insurance can’t prevent a cybercrime or risk from occurring. But, it will help your business post-attack by maintaining your financial stability. It provides financial and legal protection if you’re compromised.
Kim Lindros and Ed Tittel from cio.com says :
"A cyber insurance policy, also referred to as cyber risk insurance or cyber liability insurance coverage (CLIC), is designed to help an organization mitigate risk exposure by offsetting costs involved with recovery after a cyber-related security hack or similar event. With its roots in errors and omissions (E&O) insurance, cyber insurance began catching on in 2005."
