As more business is transacted online and as client data is now primarily stored electronically, companies are realizing that network security and cyber liability insurance is becoming increasingly necessary. The Wall Street Journal and Inc.com have picked up on this trend and published articles to this effect. The Wall Street Journal’s article explains that a small business who suffers a cyber attack and has no insurance will likely go bankrupt within 6 months. Inc.com published 6 reasons why a company should buy cyber liability coverage.
The need is easy to see, but the coverage is often opaque and confusing. If your company is considering the purchase of cyber liability insurance, there are a number of items the firm should consider. Because each policy form is unique, here is a list of items our clients found helpful to consider:
• Cyber insurance can provide first party and/or third party coverage. Which does your firm need?
• Does the policy offer non-material business interruption?
• Know what the exclusions and exact policy terms state.<
• Consider how a company’s existing general liability and errors & omissions insurance coordinates with this new coverage.
• If the firm has a policy that already covers some network security, what is needed that needs to be purchased separately?
• What risk management assistance does the policy offer?
• What sublimits are on the policy for credit monitoring and notification costs?
• Does the insurance provide forensic cost reimbursement to uncover the cause of the breach and fix it?
Contact a licensed broker to discuss whether cyber liability insurance is right your your business.