November 9, 2010
Cloud computing is here and you don't need to be a tech company to reap the benefits. It's a boon for any business that wants access to its data from any device at any time and any place. But convenience and mobility can carry a steep price. Data stored online is data that can be compromised by thieves and hackers. If this concerns you, add cyber liability insurance to your portfolio of business risk management tools.
Traditional general liability insurance policies for business typically focus on tangible losses to property and bodily damage to people. They don't usually cover misuse, destruction or distribution of data or cyber crimes like data theft and security breach. To cover such exclusions, you need a supplemental policy. While a few visionary insurance companies have been offering cyber liability insurance for years, the explosive use of email, networked computer systems, mobile technology and now cloud computing have caused many more insurers to introduce the product. That's good news when you're looking for cyber liability insurance quotes and similar types of data protection coverage since it can mean more competitive pricing.
The specifics of cyber liability insurance coverage will vary from company to company, however you should look for these basic coverages:
- Business interruption coverage. If you're hacked, contract a virus or are the victim of a denial of service attack, business interruption coverage reimburses you for lost revenue caused by a short- or long-term interruption of your business.
- Data loss and system storage coverage. While your general liability insurance probably covers damage or theft of a physical computer, it does not cover any information stored on it. This will.
- Content liability coverage. This provides some protection from claims such as someone accusing you of plagiarizing their copyrighted material from a blog, website, email newsletter and other web-based intellectual property, or slandering them or invading their privacy in your web-based publications.
- Crisis management coverage. This provides the wherewithal to hire a public relations professional to do damage control in the event you suffer data theft, breach of security, denial of service shut-downs, etc.
- Notification expense coverage. Most states have laws requiring you to notify any client or customer of your business whose private information may have been compromised because you were hacked, etc. This helps you pay for the expense of doing so.
While not all carriers offer it, when you're looking for cyber liability insurance quotes, you may also want coverage for the expense of regulatory investigations relative to ever-changing privacy legislation requirements. As of last year, 45 states had laws on the books requiring a company whose data is compromised to notify everyone who was impacted.
Do you need this type of coverage? Weigh the cost of paying for any or all of the risks listed above against the cost of the cyber liability insurance quotes you receive.
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