Are cyber liability policies able to cover third-party data breaches?
Businesses that keep data with third parties may be exposed if those parties suffer a data breach. Even if a third party is at fault for a breach, it’s possible that the business using the third party is also sued. This is becoming a more common risk as more businesses hire cloud-based storage and software services.
While not standard in all policies, some cyber liability policies might offer protection for third-party breaches. Businesses that specifically want this protection should consult with an insurance agent who knows cyber liability coverages well. A specialized agent will be able to check for protection.
What sorts of incidents are covered by cyber liability?
Depending on a policy’s coverages and terms, cyber liability might protect against:
- Online attacks against computers or servers
- Network security breaches
- Employee theft of digital files
- Phishing email scams
- Accidental breaches (including human error)
When there’s a covered incident, a policy might help pay credit monitoring costs, data recovery costs, and lost revenue due to the breach.
Does commercial property insurance protect online data?
Commercial property insurance is mainly for physical assets, and it usually doesn’t protect digital ones. While a commercial property policy would likely protect a computer against loss, it probably wouldn’t cover files on that computer.
For digital assets, files and data, cyber liability coverage is normally needed.
How much does it cost to purchase cyber liability coverage?
The cost of cyber liability coverage varies substantially. A business’s type of data, online operations, coverage needs and any past claims can all impact cost, as can many other details.
For help checking premiums, businesses can reach out to an independent insurance agent. Independent agents are able to compare policy options from among multiple insurers, checking both protections and premiums.