What Does Cyber Liability Insurance for Business Entail?

Bad actors sprang into devastating action during the global pandemic, launching cyberattacks on an unprecedented scale. In 2020, 69% of business executives interviewed by Accenture said that preventing enterprise network attacks was a constant challenge for them, and it had an unsustainable cost. In 2021, 81% of the respondents expressed the same views.

They’re not paranoid, considering that data breaches spiked 31% in 2021 compared with the previous year, with 270 incidents per company.  Fortunately, you can better manage these unforeseeable business risks and costs with cyber liability insurance in California.

What is Covered by Cyber Insurance?

Depending on the covered incident that occurred in your organization, your policy can pay for things like:

  • Your attorney fees if sued by data breach victims like your clients or employees
  • Data breach settlement
  • Data recovery
  • Public relations

Cyber insurance may cover risks such as:

  • Business interruption: This comes into play when a network breach or failure forces you to close your business or scale down operations temporarily. Covered items may include lost profits, payroll, and utilities during the interruption period.
  • Media liability: This coverage protects your business against claims of intellectual property infringement related to your products’ advertising.
  • Errors and omissions: Sometimes, your computing systems can fail and prevent you from fulfilling some contractual obligations to your clients. E&O protects you against professional liability lawsuits, whether you’re a doctor, software developer, consultant, lawyer, etc.

 

Maximizing Cyber Insurance Protection Based on Your Unique Needs

All businesses don’t necessarily face the same network threats. This is why you may need appropriate enhancements beyond standard cyber insurance coverages. Important extra protections for your business can include:

  • Social engineering: Cybercriminals can send spoofed phishing emails to employees of an organization, fraudulently duping them into making an unauthorized transfer of funds. Social engineering insurance covers this kind of fraud.
  • Reputational harm: You may need this optional coverage if a data breach incident in your organization hurts your brand reputation and profitability.
  • Bricking: Bricking insurance can pay to replace computing hardware that lost functionality due to a hacking event.

Risks That Cyber Insurance Doesn’t Cover

Your cyber liability insurance in La Canada, CA won’t typically cover the following issues:

  • Forecasted loss of profits
  • Business losses related to the infringement of your intellectual property
  • The cost of hardware or software security upgrades after a hacking event

Cyber Insurance Adopts to Pandemic Network Security Challenges

The COVID-19 crisis forced many companies to shift from secure office networks to highly vulnerable telecommuting systems. Cybercriminals swiftly identified and exploited most of the security loopholes in remote working networks, from unsecured home WiFi and VPNs to unencrypted devices. Many impacted businesses relied on customized cyber insurance policies to mitigate their data-breach-related losses.

During the pandemic, cyber insurance policies paid so many covered claims that some carriers are now facing massive financial losses from honoring these commitments. In turn, this niche insurance market hardened, causing premium hikes. Other ways in which some insurers responded include:

  • Intensifying scrutiny of cyber security controls
  • Reducing coverage using tools like co-insurance or limit caps for ransomware coverage

To learn more about business risk management with cyber liability insurance in Greater LA, contact the experts at Knight Insurance Services today. We are happy to help you find proper insurance coverage against hacking, ransomware attacks, and more.

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