Cyber Liability Insurance helps businesses recover from cyber attacks and data breaches.

What is it and who needs it?

Cyber liability insurance is an answer to the evolving threat and risk landscape of digital technology. It covers financial losses incurred as the result of a cyber attack such as ransomware or viruses. Typically, a cyber liability insurance policy will cover multiple types of claims. First Party Coverage would apply to the loss or damage to electronic data – this usually covers the cost of restoring or recovering that lost data. It should cover loss of income or extra expenses, such as recouping the money lost during a day of forced downtime while a system is being restored. Meanwhile, cyber extortion coverage would cover the cost of paying a ransom in order to restore data after a ransomware attack. Most entities that end up paying ransoms to recover data are using their cyber liability coverage to do it.

Third-Party Liability Coverage is important if your business is handling the protected data of individuals, such as health or financial data. This coverage would come in to play to cover the cost of any lawsuits filed against you for loosing or mishandling customer’s data.

Cyber Liability Insurance is a good idea for any business that either relies heavily on its technology and access to data to function, or handles customer’s data, especially if that data is sensitive or protected. For healthcare institutions, this coverage can protect not only against downtime and lost hardware or data, but also against the cost of notifying patients, monitoring their credit, and settling any lawsuits that may result from a data breach. Cyber Liability Insurance is becoming a more widely available coverage, and may be available at a discount if your IT and HIPAA Security compliance meets certain benchmarks of competence.