In this day and age, owning a business means facing a variety of dangers when it comes to online information. Storing information electronically is convenient and easy, but unfortunately, it provides a lot of risk from cyber attacks and information loss. 

Essentially any business that stores information electronically should consider carrying cyber liability insurance. Cyber attacks and breaches can cause a heavy hit to your business’ finances and reputation, leading to potential customers to hesitate to work with you. 

Certain businesses may need higher limits of cyber liability insurance, however. Industries that frequently invest in cyber liability include: 

• Medicine (hospitals, doctor’s offices, etc.) 
  
• Banks 
  
• Insurance agencies 
  
• Technology companies 
  
• Government entities 

It is always important to consider your business’ risks when it comes to technology and online information. If you are unsure about where your business lies or how much coverage it needs, be sure to speak with an insurance agent. They can help you calculate the cyber liability insurance needs of your business. 

Who is Responsible for Carrying Cyber Liability Insurance? 
Unlike policies such as professional liability, cyber liability insurance isn’t generally carried by individuals or single professionals. Instead, cyber liability is purchased by business owners and entities to protect certain online data, information and investments. If you are a business owner and purchase a cyber liability insurance policy for your company, for example, the policy should cover all sensitive data your company is responsible for keeping. 

What Does Cyber Liability Insurance Cover? 
Cyber liability insurance covers two main areas: 

First-Party Coverages 
First-party coverages may compensate for expenses directly related to a data breach or cyberattack. This includes recovery costs and other direct expenses including: 

• Loss and Damage of Electronic Data: This coverage can help replace electronic data and programs that are damaged or destroyed during a data breach. 
  
• Loss of Income and Extra Expenses: If your business loses income due to a cyber liability issue, this insurance can help cover the loss of income and any other expenses related to the threat of shut down to your business. 
  
• Reputation Damages: In many cases, your reputation may be destroyed due to a data breach or cyberattack. Cyber liability insurance can cover expenses relating to rebuilding your business’ reputation. 
  
• Cyber Extortion: Cyber extortion may occur when a hacker breaks into your business’ data and threatens to hold information hostage until you pay a sum of money. Cyber liability insurance can cover this sum and related incidents. 

Third-Party Coverages 
Third-party coverages cover claims against your business due to a breach. If your client’s information is breached while stored in your business’ information base and decides to sue, third-party coverages can help with the business’ legal expenses such as defense costs, settlement expenses, court fees and more. 

This can include: 

• Media Liability: Media liability insurance can cover claims filed against your business due to libel, slander, copyright infringement, defamation and other issues related to privacy. 
  
• Fines and Penalties: If regulatory agencies fine your company for the data breach, this insurance can cover the expenses. 

How Much is Cyber Liability Insurance for a Small Business? 
Small or large, the cost of cyber liability insurance depends on a variety of factors. While larger businesses may pay more for cyber liability insurance, there are other things that must be taken into account, such as the business’ 

• Location 
  
• Industry 
  
• Coverage Limits 
  
• Deductibles 

Businesses in industries where a heavy amount of personal information must be held may pay more for cyber liability insurance due to the nature and amount of information at risk. This includes online stores that keep credit card information as well as medical entities that store personal medical details. These businesses also tend to need higher limits of cyber liability insurance in case of an accident. 

Deductibles vary for cyber liability insurance policies. A higher deductible may mean cheaper monthly premiums, but it also means paying more out of pocket when it comes time to file a claim. 

Additional Liability Insurance  
Cyber liability insurance isn’t the only liability insurance needed for businesses. For extra protection from accidents and lawsuits, consider adding: 

• General Liability: General liability insurance covers claims of bodily injury, property damage and personal and advertising injury. 
  
• Professional Liability: Professional liability covers claims of professional negligence that cause clients to lose money.
  
• Products Liability: Products liability covers against claims of bodily injury and property damage against your business caused by a product. 
  
• Umbrella Liability: Umbrella liability insurance fills in the gaps left by your other liability policies. If your cyber liability insurance reaches its limit, for example, umbrella liability can step in to cover the remaining costs. 

Speak with an insurance agent and compare quotes to find a cyber liability insurance policy designed for your business.