Cyber Liability

What Cyber Insurance Covers

 

Every company faces cyber risk, no matter their size, but the bigger the company, the more areas of vulnerability it has.

The most prominent cyber risks are privacy risk, security risk, operational risk, and service risk.
Generally, cyber insurance is designed to protect your company from these primary risks through four distinct insuring agreements:

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1. Network security and privacy liability

2. Network business interruption

3. Media liability

4. Errors and omission

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In particular, network security and privacy liability can include both first-party and third-party costs. Let’s go into each element and what specific cyber risk it covers

 

Network Security

 

A network security coverage grant is important for most companies, including those subject to information risk and privacy risk. This aspect of cyber insurance covers your business in the event of network security failure, which can include a data breach, malware infection, cyber extortion demand, ransomware, or business email compromise.

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Network security coverage includes first-party costs—expenses that you incur directly as a result of the cyber incident, including:

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• Legal expenses

• IT forensics

• Negotiation and payment of a ransomware demand

• Data restoration

• Breach notification to consumers

• Setting up a call center

• Public relations expertise

• Credit monitoring and identity restoration

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Privacy Liability

 

Privacy liability coverage is also important for most companies, particularly those with information risk or privacy risk.

Customer and employee information can be sensitive and breaches or violations that expose such data not only threaten the security of those compromised but expose your business to liability.

Privacy liability coverage protects your company from those liabilities arising out of a cyber incident or privacy law violation. These third-party costs can arise, for example, from liabilities required in a contractual obligation, all the way to regulatory investigations by governments and law enforcement.

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Network Business Interruption

 

How dependent is your organization on technology to operate? Network business interruption coverage provides a solution for companies that face an operational cyber risk.

When your network or the network of a provider that you rely on to operate goes down due to an incident, you can recover lost profits, fixed expenses, and extra costs incurred during the time your business was impacted.

This includes loss arising from:

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• Security failures, like a third-party hack

• System failure, such as a failed software patch or human error

 

Media Liability

 

This provides coverage for intellectual property infringement, other than patent infringement, resulting from the advertising of your services. It often applies to both your online advertising, including social media posts, as well as printed advertising.