What is Cyber Liability Insurance and Why Do I Need It?

woman looking at computer with headphones on with data across the screen

Business owners, we can guess that you practically have your “life” on your laptop. It’s certainly the way of modern business. Cyber liability insurance is your protection in a digitally vulnerable culture.

Customer data and sensitive information are just a few of the items most owners store online as part of their operations. Hackers want to access your systems and your company information for many kinds of exploitation.

When you purchase a cyber liability business policy from Lake Region Insurance Agency, you help protect everything you’ve worked tirelessly to build. Your operations, livelihood, and customers depend on safe and secure online systems. 

And if an issue arises for your business, your neighbors at Lake Region help you get back on your (cyber) feet with quick claims processing and payouts. Reach out today for a complimentary quote and insurance review.

Who Needs Cyber Liability Coverage?

There are more and more cyber data breaches each year, and hackers continually up their game and hone their skills. Malware and ransomware are getting more sophisticated. With each passing week, it’s more likely you or your business could be the target of cybercrime. 

You should consider getting cyber liability insurance if your business:

  • Emails Clients, Vendors, or Employees
  • Takes Payments Online
  • Advertises Online
  • Stores Customer, Vendor, and Client Data Electronically
  • Sends and Receives Documents Online
  • Maintains Social Media Business Pages 

These are just a few of the business scenarios where cyber liability insurance makes sense. The bottom line is that almost every business now has a virtual, online component to it. This fact makes just about every company vulnerable to cybersecurity concerns.

Policy coverage

Not only is your company data at risk online, but so are your operations and revenue streams if you lose control over your information. It’s crucial to ensure your policy covers lost income in addition to data recovery and system repair. Talk with your independent agent about including the following components in your policy coverage.

First-Party Damages

  • Electronic Data Damage or Loss: You could get hit by a hacker, a virus, or a denial-of-service attack. You want a policy that can cover costs associated with data recovery and system repair. Do you store data for someone else? Would you need to hire an expert to help you recover what you lost? You can include this kind of coverage in your cyber liability policy.
  • Ransom Attacks: Increasingly, there are situations where a hacker gains control of your data. Then they send a ransom note demanding payment from you to obtain data access. Or they threaten to launch a virus or further exploit confidential customer data. Your policy can protect you in this event, as well. Cyber liability insurance pays the ransom demand as well as other expenses you may incur in the demand response.
  • Income Loss and Extra Expenses: If your business operations cease or slow down while navigating a cyber attack, your policy should cover any lost income. Further, if you incur extra expenses while getting your business back up and running, your insurance should cover those, too.
  • Crisis Management: Hackers don’t just steal your data. They also damage your reputation. Your business success depends on your “know, like, and trust” factor. You may need to spend time and money rebuilding trust with your clients, customers, and industry. Your policy should cover expenses related to managing your reputation after a data breach.
  • Notification Costs: After a data breach, you have a legal obligation to notify anyone impacted by the crime. Reaching out to each of your clients, vendors, and employees can be costly and time-consuming. An effective liability policy will cover these cyber-repair costs. 

Third-party damages

  • Regulatory Proceedings: Depending on the situation, your company may incur a fine or penalty for non-compliance with data breach regulations. A cyber liability policy can defray the costs of legal representation during your response to the proceedings.
  • Network Privacy Liability: Your policy should protect you in the event of a negligence claim around your data privacy policies and procedures. For example, an employee could open a virus-containing email that compromises your system. Or you could fall victim to a denial-of-service attack. A sufficient business policy covers you if you are found negligent in your protection of customer and vendor data.
  • Electronic Media Liability: This coverage kicks in when there is a lawsuit for slander, libel, defamation, copyright infringement, or privacy invasion. This legal trouble often happens after the publication of data on social media or other internet platforms after a cyber attack.

Take Time to Understand Your Policy

Each cyber liability insurance policy is unique. Work with your agent to carefully examine your coverage requirements and craft the plan that best fits your business operations. For example, a medical office may need more extensive data privacy negligence coverage than a clothing boutique. 

Gone are the days when cybercrime seemed to impact only giant corporations or those in the financial field. Any company that utilizes an online platform to receive, send, or store customer data is at risk. 

Feel Secure Online with Lake Region Insurance Agency

At Lake Region, our customers are also our neighbors. We understand how hard you’ve worked to launch and build your business. 

And we know how essential a solid reputation is for small businesses across Greater Minnesota. We’ll help you guard your good standing in the event you are the target of cybercriminals.

For over 50 years, we’ve built our agency on the trust of our neighbors in Cokato, New London, and Wilmar, MN. Our knowledgeable staff will help you select the policies that meet your budget and needs. 

As independent agents, the Lake Region team can search for precisely what you need among hundreds of policy options. Sufficient coverage provides the peace of mind you need, whether you are online or running a brick-and-mortar.

Contact one of our independent agents today for a free insurance review and quote. We won’t stop until you and your business have excellent protection in the event of cybercrime. We hope the worst never happens, but with our coverage and customer service, you’ll be prepared if it does.

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