About the program

You will be hacked, it is not a matter of if, but when. Data breaches occur every day. While hacking incidents are the most recognizable and expensive cause of data loss, they are not the most common. It’s a startling fact – simple human error accounts for three out of four incidents. This special suite of products and services protects your business against the expenses associated with a data breach.
Jim Honochick

Jim Honochick, CIC, CISR

President

Email Me
570-517-7500
610-868-8762

Tom Bender

Tom Bender

Business Insurance Consultant

Email Me
610-537-5714
610-868-8762

What is Cyber Liability Insurance?

There are all kinds of terms to describe the same exposure including Cyber Liability, Privacy Liability, Security, Privacy liability, Data Breach, Network Security, and Cyber Security Insurance to name a few. All of these names focus on your exposure to a data breach. A data breach can occur when personally identifiable information is compromised by hackers, a faulty transaction, malfunctioning technology, simple human error and even lost or improperly disposed data. The effect of a data breach on your small business could be devastating. You will have to pay to notify the affected individuals as well as the potential expenses arising from credit monitoring, identity theft resolution, analysis into how the data breach occurred and any steps needed to avoid another occurrence. These costs can be heavy and time consuming to identify. Security and Privacy Liability Insurance, also known as Cyber liability protects businesses in the event of a costly data breach.

Why Have Cyber Liability Insurance?

You will be hacked, it is not a matter of if, but when. Data breaches occur every day. While hacking incidents are the most recognizable and expensive cause of data loss, they are not the most common. It’s a startling fact – simple human error accounts for three out of four incidents.

of the data breach cases are from people making mistakes, such as losing laptops and flash drives

are malicious and criminal attacks

are system glitches, such as software updates, which inadvertently expose sensitive private files

No matter the sophistication of the security system, there is little that can be done to eliminate the risk of human error. A common, accidental breach is a real business risk worth considering today.

What are the Costs Associated With Data Breach Exposure?

  • Claims for failure to protect information, expense of legally required notifications and credit monitoring to those whose information is exposed, forensic expense to find out and resolve what happened, public relations expense to maintain business reputation, regulatory and payment card industry fines and hacker extortion demands.
  • Small business owners have gone out of business due to identity thieves impersonating their business and personal name leading to loan defaults, inability to access credit and loss of business reputation.

Why You Need Cyber Liability

  • Federal government regulations such as HIPAA, HITECH, and Gramm-Leach as well as forty-seven individual states have all created legislation protecting personal information of individuals. These laws outline a business' responsibilities after a breach, regulatory requirements not to mention the possibility of lawsuits.
  • The average cost per record to a business from a data breach is $194.
  • Businesses that accept credit cards or debit cards may be subject to fines and penalties for violations of the Payment Card Industries Data Security Standards (PCI DSS).
  • Claims arising from activity on your website are likely not covered under your General Liability if it concerns intellectual property or activity in a chat room or bulletin board, including social media.
  • The Federal Trade Commission estimates that the average time spent resolving a single identity theft is 400 hours. A business owner or partner or board member cannot properly manage their business while resolving an identity theft
  • If the personal credit of a business owner is ruined from an identity theft, that owner may lose the ability to access loans essential to the operation of that business.

Program Benefits

Third party liability for financial loss, mental anguish, mental distress and any breach related claims

First party coverage for breach related expenses

Full limit coverage for notification, credit monitoring and computer forensic expense

Coverage for breach costs available outside of the policy limit

Coverage available for business interruption, lost income and restoration of data post breach

Regulatory coverage for all state, federal, foreign, and privacy related regulations (PCI, HIPAA, EU, etc.)

Coverage to indemnify third party vendors or clients for breach expenses

Breach of contract coverage

PCI fines, penalties and remediation expenses

Cyber Liability

Cyber Liability Coverage

Risk Factor

The Internet has spun a whole new web of liability exposures. E-commerce, social networking, cloud storage and other technologies bring great benefits to large and small businesses alike. But with these benefits also come challenges, including protection of privacy, data and financial information of your customers. If this information is lost, stolen or compromised, your company is at risk. In fact, you may even be required by law to alert those impacted by the breach and to pay for any financial loss incurred.

Solution

Cyber liability coverage offers protection due to unauthorized access of electronic data or software within your network. It also provides coverage for spreading a virus, computer theft, extortion or any unintentional act, mistake, error or omission made by an employee. This coverage is quickly becoming more and more important as you embrace technology to help run your business.

First-Party Coverage

Risk Factor

If your company is faced with a data breach or cyber-attack, you may be forced to cover breach-related expenses such as crisis management, hiring a public relations firm to manage a data breach incident, costs associated with forensic analysis, the cost of repairing and restoring computer systems if there is a virus that destroys business software and data, and the loss of business income resulting from a data breach.

Solution

First-party coverage will insure your business for losses to your own data or lost income or for other harm to your business resulting from a data breach or cyber attack. This coverage will pay you for things like business interruption, the cost of notifying customers of a breach, and even the expense of hiring a public relations firm to repair any damage done to your image as a result of a cyber-attack. Having this funding available in the event of a crippling hack can keep the lights on till you’re able to resume your normal business operations.

Business Income

Risk Factor

What would you do if an email virus impacted the operation of your database and prevented you from serving clients for a day or more? Or what if a hacker or cyber-criminal caused a system outage or extended downtime, leaving your business inoperable? These and other events can destroy your ability to serve clients and bring in revenue, which can have a major long-term impact on the viability of your business.

Solution

Business interruption insurance compensates you for lost income if your company cannot operate as normal due to disaster-related damage that is covered under your commercial property insurance policy, such as data breach or cyber-attack. Business income insurance covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.

Third-Party Coverage

Risk Factor

If your business handles sensitive customer data (such as email lists, credit card records or other files), data breaches pose a serious threat to your financial stability. A lawsuit resulting from a data breach means your business is responsible for paying legal fees, court-ordered judgments or settlements and other court-related costs.

Solution

Third-party coverage protects you in the event of a lawsuit brought by a customer or partner for a data breach that your business' actions or negligence allowed.

Regulatory Claim Coverage

Risk Factor

If your business experiences a data breach or violation of confidential information during regular business operations, you may be found in violation of state or federal privacy laws and be required to pay fines for the violations or other regulatory issues.

Solution

You may be eligible for regulatory claim coverage which would offer protection in response to proceedings related to state disclosure laws and other governmental actions that can result in defense costs, fines and/or penalties. Coverage does vary and may be restricted by state law.

Explore our interactive
cyber liability scene!

Learn about common risks regarding your cyber liability insurance and discover how the proper insurance can help.

Request Quote

  • This field is for validation purposes and should be left unchanged.