It’s impossible to turn on the news these days and not hear something about hackers accessing secure email servers, performing large-scale credit card hacks resulting in data breaches, and much more. Owners of businesses large and small have been cyberattack and breach victims, paving way for the new cyber liability insurance sector.
These new policies cover “consumers of technology services or products” and can include “both liability and property losses that may result when a business engages in various electronic activities, such as selling on the Internet or collecting data within its internal electronic network.” Business owners can use cyber liability policies for a wide variety of things, but one of the most important aspects of this coverage type is protection in the event of a data breach.
Did you know?
- Cyber liability insurance accounts for only a small portion of the insurance sector. According to Deloitte, this insurance type, “only generates between $1.5 billion and $3 billion in annual US premiums … representing only a tiny fraction of the $505.8 billion domestic carriers wrote in total in 2015.”
- However, industry insiders expect cyber insurance to become a bigger part of the insurance industry by 2025; premiums could grow to $20 billion or more.
- According to the International Risk Management Institute article, comprehensive cyber liability plans cover business owners from data breaches and stolen identities as well as aid in the event of business activity interruption, data loss and ruin, funds losses in fraud cases, and cyber extortion.
- If insured business owners file claims, cyber liability plans can help them cover costs resulting from damage or loss of funds, time, and business operations on part of both business owners and their customers in any type of cyber breach.
Are you truly covered where you need to be?
As it becomes commonplace for business owners to move important operations online — including sales, information transfers, financial information, and presence — carrying a cyber liability insurance line has become crucial for many. General insurance policies don’t typically cover these types of losses and damages, meaning many business owners may be at risk. A negative cyber event — without proper insurance coverage — can be damaging, especially to owners of small businesses.
Regardless of size, all owners doing business over the internet should consider cyber liability insurance benefits. These policies not only provide peace of mind but also protect business owners and their clients.