What is Cyber Insurance?
Cyber insurance is a type of policy that covers a business’ liability for a data breach in which the firm’s customers’ personal information, such as Social Security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the firm’s electronic network.
Cyber coverage should not be substituted for error-and-omission coverage (professional liability insurance). Cyber insurance pertains only to third-party intrusion into data bases and files, while the latter pertains in this context to flaws in the output of consultants and software developers having nothing to do with any third party attacks. In many cases, both are essential, but they are not substitutes for each other.
Why You Need Cyber Liability
Given the proliferation of data breaches and identity theft on the rise, companies who generate their own sensitive trade secret/data and handle sensitive material of others such as personal health information (PHI) and personal identifiable information (PII) need to protect themselves against unauthorized access. While prevention through technical measures including encryption, tokenization, firewalls and intrusion detection devices, and screening of staff are essential measures, there are no foolproof alternatives against ever-more sophisticated criminals. A data breach can result in the following consequences: civil fines and settlement payments, consumer notice and credit monitoring services, cost to restore corrupted data bases, and reputational damage among others. General liability policies do not cover this exposure thus, many companies need to pursue dedicated coverage at an additional cost.
If you are worried about your company’s current state in terms of data security, we highly recommend you look into Cyber Insurance. Allow us to guide you on your search step by step. Get in touch with your UniAmerica Insurance agent today or give us a call at 1-310-835-3373.