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Cyber Security Liability: The Top 3 Coverage Concerns

  • By:
  • Alliance Insurance Group
  • |
  • Aug. 5th, 2015
Cyber security blog 8 5

Recently, several high-profile companies have fallen prey to cyber security attacks.

The latest involves a popular dating site, second in size only to Match.com. The company prides itself on being discreet and, in fact, their business model depends on it. Still a group of hackers were able to access their site data.

The criminals’ demands were as follows: shut down your site completely or we'll publicly reveal the personal information of all 37 million of your users.

Another, recent high-profile attack affected Anthem, Inc., one of the country's largest health insurance providers. The attack put the personal information of over 80 million people at risk including their addresses, birthdays, and most pressingly, social security numbers.

The ability for hackers to obtain information from such high profile organizations raises some important questions about cyber security liability. For instance, how does a company cover itself and its clients? Who is at fault when an attack occurs?

While cyber liability coverage is increasingly important, its use is relatively new. To help guide your coverage decisions, we’ve outlined the top 3 concerns you should take into account.

1. First party coverage for your employees and your damaged system - This includes equipment that's damaged, lost information, employee's personal information that gets hacked, and the loss of digital assets.

2. Third party coverage of customers or anyone having accessed your site - This involves network security, employee privacy liability, and electronic media liability.

3. The loss of business income - This includes income loss from non-physical business interruption as well as the loss of clients because their information was compromised.

A cyber liability insurance policy can cover these three areas simultaneously. It can also cover regulatory fines and penalties, attorney fees, and pay for the cost to retrieve any lost records.

Today, most companies have a digital presence. With this new business venue comes threat, and like any other threat to your business, it must be addressed proactively.

To work with an Alliance Advocate through the potential digital risks your business faces and the cyber liability insurance coverage that can help, contact us for an appointment. You can also learn more about the industries we serve or the lines of coverage we offer.