Any time that your business is involved in the handling or management of private customer data, like bank account numbers or credit card details, you may be facing serious breach opportunities. When a data breach occurs, the very financial stability of your company can be in question. Thankfully, you are not alone in the realm of being concerned about data breaches and other cyber liability concerns. Cyber liability insurance now provides critical protection against the high expenses linked to a data breach. Although each case is unique, a data breach can cost a company hundreds of thousands of dollars.
If a lawsuit is filed as a result of a data breach at your company, your business can be responsible for court-ordered settlements or judgments, legal fees, and other court related expenses. You will also likely be responsible for notifying your customers about the breach, giving them credit monitoring services, and investing heavily in public relations to help improve the reputation of your business. Without cyber liability insurance in place, the costs of a data breach can decimate your company.
You may be able to get cyber liability insurance as a policy on its own or as a supplemental coverage to a general business owner’s policy. There are two primary types of cyber liability insurance known as third-party defense and first party defense. When you have third-party coverage, you’ll be protected in the event that a lawsuit is filed against you by a partner or a customer resulting from a data breach where you were negligent. First party coverage, however, provides you with assistance in the form of financial compensation to help you address urgent business and customer needs, like the challenges associated with your IT network going down.
Many small business owners assume that they are not at risk of a data breach, but they are, in fact, a heavy target by cyber hackers. The risk of data breaches in the small business environment is quite real, and you may wish to obtain both third-party and first party coverage to protect you from the costs associated with the data breach. To learn more about the right kind of coverage appropriate for your company, work directly with an experienced insurance agent who can give you a quote and further explanation. In the aftermath of the data breach, it will be important to restore customer confidence in your company and rectify the outcomes of the breach as quickly as possible. Having cyber liability insurance in place can help you accomplish these goals effectively.