Cyber Liability Insurance

As many workplaces become increasingly dependent on technology, appropriate adjustments must be made when assessing risks and establishing loss control measures. While technological advancements may help organizations streamline daily operations and pursue innovations, they may also generate significant cyber risks and exposures. Like physical perils, cyber incidents can have devastating financial ramifications, making cyber insurance a valuable investment. 

What Does Cyber Insurance Cover? 

As its name suggests, cyber insurance may provide critical financial security related to data breaches, cyberattacks and other cyber incidents. If a policyholder’s systems, networks or data are compromised, such as by a phishing attack, malware infection or social engineering scheme, an adequate cyber insurance policy may help to limit financial losses that could otherwise incur catastrophic out-of-pocket costs. 

What Are the Two Types of Cyber Insurance? 

Cyber insurance may come in many forms, and the details, capabilities and limitations of policies may vary significantly. In some cases, cyber coverage may be classified as one of the two following primary types: 

• First-party cyber insurance—This coverage, also known as data breach insurance, may help pay for direct financial consequences following a cyber incident, such as the following:
  • Response costs, such as investigating the incident, notifying affected parties and enlisting the assistance of consumer and credit fraud monitoring services
  • Business interruption costs, including lost income, hiring additional staff and renting equipment
  • Ransomware payments made necessary by cyber extortion
• Third-party cyber insurance—This coverage, also known as cyber liability insurance, may provide financial assistance if your business is sued following a cyber incident, such as by helping to pay for the following legal costs:
  • Attorney fees
  • Settlements
  • Court-ordered judgments 

Is Cyber Insurance Really Necessary? 

Cyber insurance should be considered a top priority for any organization that relies on technology in its daily operations. This type of coverage may be especially integral to the loss control practices of businesses that regularly store, transmit or otherwise manage sensitive data, such as banking information, health records and Social Security numbers. Without adequate cyber insurance, even a single ill-advised click or lapse in attention by a usually reliable employee could significantly damage an organization’s finances and future. 

Get the Right Coverage 

The dedicated staff at Shankland Insurance is committed to helping businesses, families and individuals in the Charles City and Floyd areas protect themselves with appropriate coverage. Our agents will work with you to assess your circumstances, identify your needs and procure optimal policies. Contact us today to get started.