Why Your Business May Need Cyber Liability Insurance

When a breach of personal information occurs online, who is responsible for the damage done? In most cases, the company that allowed the breach is held responsible for this, and this type of event can be extremely costly. Unfortunately, most commercial insurance policies do not cover cyber breaches like this, which is why you should purchase cyber liability insurance if you run a business that accesses personal information. Here are a couple things to know about this if you are a business owner.

How breaches occur

Hackers are people who find ways to access information online, and they can be very good at getting their hands on personal, sensitive information such as credit card numbers, social security numbers, and names. When they access this information, they can take the data and run up debts. This is often referred to as identity theft, and the average case of identity theft is around $1,500. If 1,000 people are affected by one breach, the amount could total $1,500,000.

If your business has access to sensitive information, you must take every step possible to prevent this from happening, because you could end up owing this money when it is all said and done.

How cyber liability insurance works

Cyber liability insurance is a type of policy that is strictly used for protecting situations like this. If your company uses the Internet at all and has access to personal information, your business should look into getting a cyber liability policy.

The cost of the policy might be as low as $2,000 per year, and this is a small amount to pay for such important coverage. The best part about this coverage is that it typically covers every expense you would incur if a breach occurs. This includes the money customers lose from identity theft, the costs required to notify customers of breaches, and the costs to offer credit monitoring services to all customers that might have been affected by the breach.

When you decide to get a cyber liability policy, the insurance company may base your rates on the following factors:

• The type of business you run
• The types of information you have access to
• The current policies you have in place to avoid Internet breaches

If you would like to find out more about this type of insurance or other types of commercial insurance policies your business may need, contact an insurance company today.