What Does Cyber-Liability Insurance Cover?

small-business-cyber-liability-insuranceWebsites, social media, product review forums, comments and email allow companies to interact with customers 24/7.  But they all bring a new business risk that isn’t covered by your basic business insurance policy: cyber liability.  Cyber liability insurance is designed to cover these new risks.

Cyber-Liability? What Is It?

Cyber liability risks are evolving daily as individuals and business change the way they use the web & social media. Here are some of the many ways you could run into trouble:

  • There can be information breaches or loss of a client’s personal data (which can lead to identity theft), and you could incur heavy costs to notify your clients in the event of a data breach.
  • You could have issues that may arise such as other companies or individuals accusing you of damaging their brand or reputation online.
  • Others may claim copyright infringement or the theft of intellectual property.
  • You could lose, or have stolen, electronic media that has sensitive data on it.
  • You could breach your own website’s privacy policy and be sued as a result.
  • An employee could post something damaging to you or someone else on your business Twitter stream or Facebook page.
  • You have the possibility of damage to your network or website from hackers or claims against you for inadvertent virus transmissions from infected computers.
  • Your blog posting could contain an opinion that gets you into trouble.
  • Photos posted from an event may infringe on photographic copyright or be problematic because someone is recognizable and did not authorize the use of his/her photo.

Any of these situations and many more, put your business at risk.  And many of these types of risks are actually evolving as the internet and social media uses spread.

So, What Now?

Most of these risks are not covered under your primary Business Liability Policy and may even be specifically excluded. With everything that can go wrong, you may be thinking doing business online is just not worth it!  But the effective use of new technology is critical to building future business these days, so it may just be time to add the protection of cyber liability insurance. 

Cyber Liability Policies

Cyber Liability insurance is also evolving as the types of risks change. And there isn’t one standardized policy style as yet, so it’s important to know and understand the coverage you are purchasing. But, even so, Cyber liability coverage can be used to protect your company’s assets and reduce your risk from potential problems.  This will mitigate the risks from any unforeseen online incidents, such as an employee’s thoughtless actions on the company website, or a misuse of a photograph, which leads to the photographer seeking compensation. 

There are endless incidents that this type of insurance can protect you from including fraud or privacy issues, website damage, virus issues, defamation lawsuits, intellectual property disputes, and more.  This type of insurance can even cover things such as system damage to the computer itself, loss of revenue due to downtime, expenses due to notifications sent out, monitoring systems, HIPAA issues for medical practices, crisis handling and even investigation costs if a major investigation by the government or other entity is required.

Don’t Wait for a Problem

Cyber liability insurance can certainly give you peace of mind while doing business online.  The future of business is on the Internet and in smartphone apps; there’s no avoiding it so talk to your insurance agent or broker to discuss ways to protect your business assets in case of any problems.

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