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What You Don’t Know Can Hurt You: Cyber Liability

By October 29, 2015June 9th, 2020What You Don't Know Can Hurt You

Welcome the first of a 5-part installment entitled “What You Don’t Know Can Hurt You.” Over the next few weeks we are going to explain 5 valuable insurance coverages, that most business owners don’t know and/or understand, and for that reason don’t often purchase as part of their insurance and risk management plan. We hope that through these 5 segments, you will become a more informed consumer.


Does your business handle sensitive customer or employee data, such as credit cards numbers, bank account information, or Social Security numbers? If so, your business has a potential for liability and/or property loss if there were to be a data breach or network security failure.

We have all heard the stories in the news about Target, Home Depot, and Sony. Hackers were able to steal over 56 million payment records from Home Depot, and over 109 million records from Target. At Sony, hackers exposed over 47,000 employee records including social security numbers and inner office email. The fact is these are multi-billion dollar companies with large risk management and IT departments, and they are having difficulty preventing cyber attacks. Don’t be fooled into thinking that hackers couldn’t steal your sensitive employee and customer data. This is a common mistake that many small businesses don’t think of that could end up costing your business thousands of dollars.

Many insureds think that their standard General Liability policy will cover these risks. However, court cases have shown precedent that cyber risks are not covered under the General Liability policy’s Personal & Advertising Injury coverage. Insurance carriers are going even further and adding exclusions to their policies. These endorsements further clarify that the General Liability policy is not meant to cover cyber liability risks.

So what else can a business do besides encryption and hiring another IT director? One of the most logical solutions to protect your businesses’ assets is Cyber Liability insurance. With a Cyber Liability policy you can protect your business from expenses that result from a data breach and more.

Cyber Liability polices pack a lot of coverage into one policy. The following coverages are usually available to most businesses:

  • Data Breach Liability
    • Covers claims arising from the disclosure of private information
  • Security Breach Liability
    • Covers claims arising from the failure of your computer hardware or software to prevent transmission of malicious code or viruses, the inability of customers/employees to access your websites or systems, and denial of service attacks
  • Regulatory Action & Defense Expenses
    • Covers expenses that result as a violation of federal or state laws
  • Payment Card Industry (PCI) Fines & Penalties
    • Covers credit and debit card fines and penalties as a result of inadequately securing payment card info
  • Website Liability
    • Covers claims for libel, slander, plagiarism, and infringement of copyright or trademark on your website content
  • Crisis Management
    • Cover expense of hiring a PR firm to help your reputation and brand after a breach
  • Data Breach Expenses
    • Covers notification letters, PR, forensics, and credit monitoring expenses for the victims of a data breach
  • Cyber Extortion
    • Covers extortion or ransom payments and rewards to catch the extorters
  • Business Interruption
    • Covers loss of income that results after your company suffers a data breach
  • Risk Management
    • Offer preventative measures and guidelines to customers to help prevent a data breach from occurring

Operating a business in today’s society is a lot different than 10, 15, or 20 years ago. Businesses today use mobile apps to take client payment information and store sensitive client information on cloud servers. We urge any business that stores or has access to sensitive information to review their security measures with an IT expert and to consider covering their business with a Cyber Liability policy.

For more information on how Cyber Liability can protect your business, please contact Brian Ford at or 727-345-0242.