Most small businesses are prone to cyberattacks because they lack the security infrastructure of larger businesses. According to research, approximately 88% of small business owners are exposed to cyberattacks. They are also an attractive target for cybercriminals because they have sensitive information. However, cyber liability insurance seeks to hinder the activities of these cyber criminals.
It is also an effective tool that can be used to help small businesses defend against cyberattacks. Cyber liability insurance can also be referred to as cyber security or cyber risk insurance. This type of insurance will not only help you respond effectively to cyber breaches, but it will also help you cover costs.
What is Cyber Liability Insurance?
Cyber liability insurance is suitable for small business owners. It is insurance for cyber threats or breaches involving computer systems and data. It protects sensitive customer information like credit card numbers, account numbers, health records, driver’s license numbers, and social security numbers.
How Much Does Cyber Liability Insurance Cost?
The cost of this insurance policy depends on several factors, which are:
- The number of people who have access to your systems and data
- Your company’s exposure to cyber risk
- Your company’s revenue
- Your claims history
- Your network security
- The amount of insurance coverage your company needs
However, the average cost of this insurance is in the range of $145 per month for small business owners. Cyber liability coverage comes in small and large amounts.
Who Needs Cyber Liability Insurance?
If you are in any business that stores or processes sensitive information, then you should consider purchasing cyber liability insurance. Below are the lists of businesses that will benefit more from this insurance.
- Retailers
- IT services
- Restaurants
- Real estate agents
- Accountants
- Contractors
- Consultants
- Hair salons and barbers
- Marketing Companies
Businesses that store data such as addresses, medical records, credit card information, social security numbers, customer names, and other vital financial information should consider cyber insurance.
What Does Cyber Liability Insurance Cover?
The coverage that this insurance offers is aimed at protecting your business from claims that arise from everyday business operations.
- Business interruptions
- State and federal regulators impose fines as a penalty for violating rules or regulations.
- Notification expenses to alert affected customers that their personal information has been bridged
- Crisis management expenses
- In case of a cyber-incident, it is important to have access to breach response resources.
- Forensic investigations
- The costs of privacy lawsuits are high.
- Finally, costs that arise as a result of a security breach or an extortion threat.
Also, it covers costs incurred due to phishing attacks or network outages.
What Does Cyber Liability Insurance Not Cover?
It would help if you took note of some of the exclusions in your cyber liability insurance policy. These are the coverages that have been excluded from this insurance policy.
Social Engineering
Most insurers do not cover social engineering because it involves tricking people into transferring company funds. Note that social engineering is one way cyber criminals target their victims. However, this coverage may attract a smaller coverage limit; it can be an optional add-on.
Bodily injury or property damage claims
There is no protection for claims of bodily injury or property damage. Cyber liability insurance does not cover this, but you can purchase a general liability policy for it.
Criminal activity
When you purchase cyber-liability insurance, it will not insure you against robbery, employee theft, fraud, or other crimes. For this type of coverage, commercial crime insurance will be suitable.
Loss of Property
Loss of property like computers and phones will not be covered by this insurance. In this case, you will need to employ the services of your commercial property insurance comes in.
The Best Companies To Purchase Cyber Liability Coverage
If you are ready to purchase cyber liability insurance but are a bit confused about where to get it, there is no need to worry. Just take a look at the list below and make your choice. Here are the best insurance providers for this insurance.
CoverWallet
You should consider CoverWallet if you are looking for the best cyber insurance provider. They are the best option for business owners who want to shop around for cyber liability insurance but don’t know where to begin. This is an excellent insurance marketplace that lets you compare quotes and insurance offerings from different insurers.
Liberty Mutual
Liberty Mutual aims to cater to the needs of small business owners because it offers cyber liability coverage. The major aim of Liberty Insurance is to make cyber insurance more accessible to smaller companies. However, it is possible to purchase cyber liability insurance as part of the Liberty Mutual general liability policy or, better yet, the business owner’s policy.
Chubb
Chubb is an A+-rated insurance company. It has been given this high rating because it sells many types of business insurance, and cyber insurance is not an exception. Chubb’s cyber coverage does not only deal with cyber-related issues. It also deals with privacy, media liability coverage, and networks. Also, it contains first- and third-party insurance.
AIG
AIG is a recommendable cyber insurance provider that helps its clients prevent cyberattacks. Cyber insurance is customizable with AIG, which makes it ahead of the other insurance companies. AIG also offers standalone coverage, but you can integrate cyber coverage into your property or general liability policy. You can choose whether you want first- and third-party coverage or just first-party coverage.
Conclusion
Cyber liability insurance is essential for every business owner who has a customer’s database, and it also covers the damage that your business suffers because of a cyber-security breach. Without this insurance, you are prone to cyberattacks, which can damage the image of your business. And guess what? Every business owner needs to purchase this insurance for the safety of their business.