If your business stores any confidential information online – such as credit card numbers, Social Security numbers, or customer addresses – then you are at risk for cyber attacks. A cyber attack can occur when someone hacks into your computer system, at home or at your place of business, and steals this information, or even when a virus is released that destroys all of your data. If your business suffers a cyber attack, you may be liable for the damages caused. This could include financial losses, stolen identities, and damage to your company’s reputation. To protect yourself from these risks, it is important to have cyber liability insurance.
Does my Commercial Liability Insurance Cover Cyber Events?
Most commercial liability insurance policies exclude cyber events, which means you will need to purchase a separate policy to be protected. This is because the risks associated with cyber attacks are still relatively new and not well understood. As a result, insurance companies are not sure how to price these risks. However, as more and more businesses become victims of cyber attacks, insurance companies are starting to offer cyber liability coverage.
If you are considering purchasing cyber liability insurance, there are a few things you should keep in mind.
- First, make sure that the policy provides coverage for both first-party and third-party risks.
- First-party risks are those that affect your business directly, such as data loss or destruction.
- Third-party risks are those that occur when someone else, such as a customer or vendor, is affected by a cyber attack on your business.
- Second, make sure that the policy covers both cybercrime and cyber terrorism.
- Cybercrime is any illegal activity that uses a computer to commit a crime, such as hacking or identity theft.
- Cyber terrorism is the use of computers to disrupt activities or cause fear and panic, such as releasing a virus into the public water supply.
While cyber liability insurance can help protect your business from the financial damages caused by cyber attacks, it is important to remember that no policy can completely eliminate all risks. The best way to protect your business is to implement strong security measures and have a plan in place for how to respond if an attack does occur. By taking these precautions, you can help reduce the chances of cyber attacks and limit the damage if one does occur.