When you think of cyber liability coverage for your business, you probably think of ransomware attacks, and with good reason: Ransomware incidents have spiked over the past few years, as have the associated costs. In many cases the actual ransom amount, steep though it may be, pales in comparison to the associated costs of recovery and reputational damage.
So yes, you absolutely need to indemnify your business against a ransomware attack with appropriate cyber liability insurance. But there are many other threats to your business associated with technology, ranging from copyright issues to something as simple as a lost or stolen laptop. That’s why cyber coverage goes beyond ransomware to cover these other situations you might not have considered.
Data breaches: Although ransomware dominates the headlines, not all breaches are ransomware attacks. There’s a huge exposure in your employees’ or clients’ personal information, or your company’s intellectual property, winding up in the wrong hands. This can happen via hacking, a company laptop being lost or stolen, or simply from a disgruntled employee. Cyber liability coverage offers protection to help recover from such incidents.
Intellectual property: An employee accidentally uses a copyrighted photo in a social media or blog post, or posts something disparaging about a competitor. Cyber coverage addresses exposures due to trademark or copyright infringement, libel and defamation, among other things.
Third-party damage: We live in an interconnected business world, which offers many conveniences … and some dangers. If your systems transmit a virus or other malware to a customer or vendor, you’re liable for the damages. Cyber coverage will protect you in these situations as well.
System failure: Not all damages are digital. If a fire or flood causes damage to your systems, your standard commercial policy will generally cover the equipment, but not any lost data or code. That’s where cyber liability comes in.
Business interruption: Another popular alternative to ransomware is the denial of service (DoS) attack. This is essentially digital vandalism that overloads your servers or renders your website inaccessible. In either case, it costs you money in the form of interrupted business operations. Cyber liability coverage includes help in recovering from such losses.
As with any insurance, a cyber liability coverage plan should be designed to address the exposures specific to your business. These will vary widely depending upon your industry and your degree of connectedness, but virtually every business needs some form of cyber coverage.
Questions about cyber liability coverage? Contact Consolidated Insurance.