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cyber security coverage in the age of ransomware

A cyber attack incident will occur every 11 seconds in 2021… Ensure you’re covered

Cyber attacks are on the rise in 2021.  According to Cybersecurity Ventures, a cyber attack will occur every 11 seconds in 2021, nearly twice the rate in 2019.  With that being said, it’s important to ensure your business is covered in case a cyber attack does occur, with cyber liability coverage. 

Who needs cyber liability insurance?

While some general liability and professional liability policies include some basic cyber liability coverage, some additional coverage may be needed. Businesses that store personally identifiable information (PII) for both employees and customers should have additional coverage. 

Cyber breaches can occur in a multitude of ways. They can be executed through phishing emails, viruses, ransomware, or other malicious attempts to corrupt your data. The best way to begin protecting your data is to establish internal safeguards. This includes strong passwords, monitoring electronic device access, and access to different software tools. 

What exactly does cyber liability insurance cover?

There are a few types of coverage within a cyber liability policy. First-party coverage and third-party coverage to help ensure you’re covered for whatever comes your way.

First-party coverage includes coverage for immediate expenses related to the cyber breach. These expenses typically include:

  • The cost of notifying employees and the public
  • Marketing and public relations response that protect the company’s reputation
  • Extortion money
  • Repairing the damage to software and hardware
  • The cost of business interruption and missed income while operations are suspended
  • Other ancillary costs

On the other hand, third-party coverage helps a company defend against lawsuits and legal claims. There are a few lawsuits that can occur. Privacy lawsuits are covered under this coverage in case you have breached the privacy of customers and employees.

Regulatory body fines are covered, as well as media liability claims (copyright infringement, libel, or slander). Lastly, breach of contract and negligence claims are covered with third-party coverage.

While it’s important to understand what is covered with cyber liability insurance, it’s also important to understand what’s not covered.

It’s important to understand what all of your insurance coverage does not cover. As when you look to ensure you are protected, you can see where your vulnerabilities may lie. Some common exclusions from cyber liability insurance include:

  • Bodily injury and property damage claims: Any claims of bodily injury or property damage will not be included in your cyber liability insurance policy. However, a general liability policy will cover these claims.
  • Criminal activity: Cyber liability insurance policies do not cover fraud, robbery, employee theft, and other crimes. However commercial crime insurance will cover these claims.
  • Social engineering: A cyber liability insurance policy will not cover when employees are tricked into transferring company funds. This can be an additional add-on with some cyber liability plans.
  • Loss of property: When an employee loses a piece of property, like a phone or computer, cyber liability will not cover the cost. However, a commercial property insurance policy will. 

Like many businesses, you likely utilize computers, and other electronic devices to send, receive, and store electronic data. Data is one of your most valuable assets. It’s important to ensure that you protect that data and the cost of losing it when you can. Contact Roger today to see how you can protect your cyber assets today.


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does your coverage match your business size?

The types and amount of insurance that you need for your small business are based on several factors. Primarily:  the number of employees, your total sales and annual revenue, your industry (some industries have a higher need for insurance), the State in which you live, and of course your tolerance for risk.

Home-based businesses

These days many businesses are home-based.  Traditionally, however, a home-based business was defined as one with no full time employees and revenues under .5 million dollars.

Just because the business is small, doesn’t mean it shouldn’t be insured.  According to the U.S. Small Business Administration (SBA), more than half of American businesses are home-based. Homeowners insurance alone will not necessarily cover your home-based business against business property loss or liability.

Small businesses

Do you know all of your employees by name? Does your business make less than 5 million dollars annually?  Some insurers consider businesses with 50 or fewer employees to be small businesses. The SBA defines a small business concern as one that is independently owned and operated, is organized for profit, and is not dominant in its field.

A common small business policy—called a BOP, for “Business Owners Policy”—is usually available only for businesses with fewer than 100 employees and revenues of up to about $5 million or less. While you can purchase customized insurance to cover your specific type of business, insurers offer standardized small business policies that enable you to affordably protect your company against the most common risks.

Medium-sized businesses

If your small business is growing and thriving, you may have graduated into a medium-sized company. Again, definitions of business sizes vary, but if your company has between 50 and 1,000 employees with annual revenues between $10 million and $1 billion, you can seek insurance as a medium-sized business. Insurers have special policies designed specifically for this segment that may combine property and liability coverage. If your medium-sized business owns especially expensive equipment or has locations in more than one state, you may also want to seek special customized policies.

Large businesses

Large businesses have at least 500 employees; revenue requirements are dependent on the type of business.

Large, complex businesses have multi-million dollar risks, and commercial insurance is customized to meet a company’s specific needs. Large companies even have employees dedicated to analyzing the potential causes of accidents or loss, recommending and implementing preventive measures, and devising plans to minimize costs and damage should a loss occur, including the purchase of insurance and managing claims. This practice is known as risk management. If you run a small business, you generally have to act as your own risk manager. Sometimes a small business will hire a risk management consultant. If you’re unsure, ask an insurance professional to help assess the risk for businesses of all sizes.