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.
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.