Businesses are often the targets of cyber-criminals looking to steal confidential financial data. That's why it's becoming more common for businesses of all types to carry data breach and liability insurance. Here's what you need to know about this coverage that protects certain assets impacted by a cyber-attack.
Cyber insurance covers a broad range of risks associated with using a computer network connected to the internet. While data breach insurance is aimed more at helping small businesses, cyber liability insurance is designed for more extensive operations. The latter offers more coverage for a broader range of scenarios.
It's clear now that any business can get hacked when you consider that hackers have penetrated some of the largest institutions in the nation. Getting the right cyber coverage for your business will be helpful if you ever face a breach that negatively impacts clients.
The cost of PR alone to repair reputational damage can involve expensive media promotion. Legal fees could apply another high cost after a breach to defend against a lawsuit or series of cases from angry clients. You can customize your cyber insurance to put safety nets in place so that insurance pays PR and court costs.
There are things in common between cyber liability and data breach insurance, but they are distinctly different overall. Cyber liability covers lost income from network downtime, ransomware payments, and legal services for compliance with government regulations. It also covers federal and state regulatory fines and settlements involving employees and customers.
Data breach insurance, by contrast, is more focused on covering expenses after a breach, such as notifying affected clients and offering credit monitoring services to victims of the attack. It may pay for PR expenses and can be amended with extensions such as for business income during downtime.
Cyber liability insurance and data breach coverage both have limits as to what they cover. In many cases, what they lack in coverage can be filled by some other type of coverage extension. Mistakes made by executives or employees that lead to a breach, for example, can be covered by professional liability insurance.
More general coverage is found in a general liability insurance plan, where you can add extensions to protect specific equipment. If someone vandalizes equipment, a commercial property insurance plan will likely cover it.
Cyber insurance costs vary from state to state and are directly impacted by factors such as the number of clients, the type of confidential data you store, and your location. Revenue and claims history are also important factors that affect your premium.
Businesses can collapse overnight due to a cyber-attack. Be prepared by having the right insurance in place with Knight Insurance Services before hackers try to wreck your operation. Contact us today for further assistance. You can also call us at (818) 662-4200 for your queries.
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