Posted on: 31 December 2014
Just about any company with an online presence could potentially stand to benefit from cyber liability insurance. With the increasing importance of the Internet and data storage via "the Cloud" in every industry, companies are at risk of data breaches that could lead to catastrophic financial and legal consequences.
Business owners need to be aware that running a website qualifies a company as an online publisher, and being considered a publisher brings with it certain liabilities. Not only will cyber liability insurance cover liabilities that arise from published content on a company website, but it will also cover other first- and third-party risks related to doing business via the Web, including intellectual property, privacy, and computer virus transmission issues.
Who needs cyber liability insurance?
The determining factor in deciding whether or not a company needs cyber liability insurance is the sensitivity of company data stored via the Internet or any other type of computer network. Any such means of storing company data could be compromised by attacks from hackers or system malfunctions. If data and information are a company's most significant assets, cyber liability insurance is probably a good idea.
The following are five of the most convincing reasons for a company to acquire cyber liability insurance:
- Increasing prevalence of cyber crimes- Cyber crimes are on the rise, and their frequency is only likely to increase as more companies begin storing sensitive information via the Cloud. The potential damages of having information like client bank account or credit card information stolen makes cyber liability insurance an absolute necessity for many companies.
- Importance of maintaining a good reputation- Cyber liability insurance not only provides coverage to handle financial damages, but it can also fund a public relations campaign intended to minimize any negative impacts a security breach has on company reputation.
- Inevitability of malfunctions- Even if companies avoid cyber attacks, they are sure to experience system malfunctions or hardware/software malfunctions at some point that could compromise data and decrease profitability. One of the most important advantages of cyber liability insurance is coverage for this potentially very costly inevitability.
A cyber liability insurance policy generally covers a wide range of liabilities left out by standard business insurance policies. However, each policy is different. As cyber liability insurance is a relatively new concept, there is a great deal of variation in what can be included in this type of policy. Companies can usually negotiate with insurance providers, like Meyers Renter Insurance, to have cyber liability policies tailored to their unique needs.Share