Do You Know How to Price Cyber Liability Coverage?

Insurance companies offer cyber liability insurance to protect businesses from the risks of exposing sensitive information to hackers. These policies may exclude certain acts or not cover certain losses. Understanding what cyber liability coverage includes and excludes is important when choosing a policy. Here are some of the common inclusions and factors that affect the price of a policy.

What Cyber Liability Usually Covers

Cyber liability insurance policies generally cover the costs of recovering financial losses and legal expenses related to a cyber attack including:

  • Notifying customers that a data breach occurred
  • Unlocking systems in the wake of a ransomware attack
  • Hiring legal services related to lawsuits and government legal action
  • Paying federal or state fines
  • Dealing with issues related to a network that goes down

You need to review your cybersecurity risks to determine whether this coverage alone is adequate.

Cost Factors

The amount of coverage you need is the main cost factor when purchasing insurance, but many variables come into play, including:

  • Type and amount of sensitive information handled
  • Company revenue
  • Size of the company
  • Company history regarding insurance claims

Don’t forget to add the cost of any supplements your company needs to the cost of basic coverage to determine an accurate cost.

As with any insurance, the higher the risk, the more coverage will cost. You also need to check the exact coverage against your company’s requirements.

Weigh your needs against the costs when choosing cyber liability insurance to get the policy that works best for you.

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What Is Third Party Cyber Insurance?

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Talk of cyber risk in business is becoming more mainstream than ever before. With cyber risks, insurers have more comprehensive and advanced options for businesses. If you know anything about cyber insurance, then you probably already know what first-party cyber insurance is. First party insurance insures the company where the data breach occurred. In terms of the first party vs third party cyber insurance, the third party protects the companies who are responsible for the systems.

What Is Third Party Insurance?

Third party insurance protects the IT companies and independent contractors who are responsible for the data. Third party insurance protects against theft of confidential information on your network, failure to stop a virus transmission to a third party and any time where confidential information gets exposed.

Who Should Invest in Third Party Insurance?

Those who should consider third party insurance are programmers and IT firms. These people may end up named in a lawsuit if there are any problems with the software or network. If a major company suffers a data breach, it may be your company that failed to stop it.

You should always take the cyber risk seriously. Now, the company that hires you to help protect their information is not the only company that needs cyber insurance. When it comes to the first party vs third party cyber insurance, programmers and IT firms need the third party.

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