What’s Covered, and How to Fill the Gap
You need it for a number of business-related issues, including theft, negligence, and property damage.
However, if you’re under the impression general liability insurance covers your company if it’s hacked, or becomes the victim of a malware attack…
Crucial differences exist between general liability insurance and cyber insurance. Companies of any size, with a digital presence of any type, need to be aware of what protections their insurance really provides and areas of vulnerability.
Let’s break it down:
Commercial General Liability (CGL) insurance covers a wide variety of situations that might occur at a business.
What it does:
Covers your business for bodily injury, personal injury, and property damage caused by the business’s operations that occur on the business’s premises.
For example, let’s say you run a small grocery store. One evening, a customer bumps a shelf, sending Cheerios all over the aisle, and injuring their wrist as they catch their fall. Your CGL policy would cover the costs associated with the customer’s medical needs (“bodily injury”), and you might also get covered for the loss of the damaged Cheerios (“property damage”).
CGL insurance also covers your company in case of a class action lawsuit, advertising injuries, negligence, and other medical or injury-related issues.
What it doesn’t do:
General liability insurance doesn’t cover the costs or legal impacts of cyber attacks, data breaches, or other digital accidents.
When a business experiences a cyber attack, they often find the fallout to be much greater than anticipated. If information is stolen, paying a ransom and getting it back is a complicated, drawn-out process that often leads nowhere and can lead to loss of business and reputation; the legal and financial ramifications of a cyber attack ripple outwards.
Between IT forensic costs, credit protection, regulatory fines, and often the complete halt of day-to-day operations, it’s no wonder the average cost of a data breach is in the millions of dollars.
That’s where Cyber Insurance comes in.
What it does:
In comparison to general liability, cyber insurance is specifically designed to protect a company from financial loss associated with cyber exposures, data breaches, and ransomware attacks. Both the legal and financial issues are relevant in many cases, as privacy protection laws extend to digital data.
For example: with cyber insurance, if your company was attacked and personal client data was leaked, you could claim it on your coverage to avoid lawsuits draining your business.
What it doesn’t do:
Cyber insurance generally doesn’t pay for any property damage related to a data breach or cyberattack (for example, hardware that was fried during the incident).
We know what you’re thinking: how do you know if your business needs cyber insurance?
Does your business store digital information, like email addresses, payment details, or other personal information? How about client information? In a nutshell: if anyone emails, accesses the internet or has software living on a server or in the cloud, they need cyber insurance.
Whether it’s company, employee, client, or financial data—you need cyber liability insurance.
A cyber-attack can lead to lost sales, operational downtime, and other business disruptions. And both ransomware attacks and breaches are up in frequency:
“For 83% of companies, it’s not if a data breach will happen, but when.” – IBM
Are you prepared to accept those odds without protection?
With the increasing frequency of cyber attacks and the potential impact on your business, cyber insurance is a must-have in today’s business world.
Getting the right cyber insurance plan can be tricky… but worth it. Ready to dive in?