2014

Cyber Liability Insurance

Cyber Liability Insurance protects IT businesses from one of their biggest financial threats: data breaches. Depending on the kind of IT work you do, you may want one of the following Cyber Insurance policies...

For most IT consultants small tech businesses, it’s more important to have Third-Party Cyber Liability Insurance. If you don’t know the difference between these policies, don’t worry. Below, we’ll look at what each covers and help you figure out which policy makes the most sense for you.

First-Party vs. Third-Party Cyber Liability

What’s the difference between first- and third-party cyber liability? A first-party data breach is one that happens on an IT consultant’s own network. A third-party breach is one that happens on a client’s network and involves technology that the consultant may have installed or serviced.

Predictably, First-Party Cyber Liability Insurance can pay for the costs of a breach on your own network. Third-Party Cyber Liability Insurance can cover the cost of a lawsuit if clients sue you over a breach on their network.

Earlier, we said that most of the IT consultants and smaller tech businesses we work with are more worried about third-party breaches. For most IT contractors, their biggest data security risk has to do with their client’s data. Not their own.

That’s why, for most IT contractors, the Third-Party Cyber Liability Insurance coverage that comes with Professional Liability Insurance is more important than First-Party coverage.

What Does Third-Party Cyber Liability Insurance Cover?

Professional Liability Insurance with Third-Party Cyber coverage helps cover legal costs when a client sues you over a data security incident on their devices, networks, or systems. If you’re sued, your policy may cover…

  • Lawyers’ fees.
  • Court costs.
  • Costs to settle the case out of court.
  • The damages you owe a client.

The Net Diligence Cyber Claims Study [PDF] found that the average cost of a data breach settlement was $880,839. If a client does have a breach, an IT consultant could be liable for these exorbitant legal bills.

With the high cost and unpredictable nature of lawsuits, Professional Liability Insurance with Third-Party Cyber Liability coverage offers important protection for technology companies.  

What Does First-Party Cyber Insurance Cover?

First-party data breaches are expensive – no shocker there. When your company’s security is compromised, you’ll have to pay for all sorts of clean-up costs. That’s where Cyber Liability Insurance kicks in.

Cyber Insurance may cover…

  • Customer notification costs.
  • Crisis management services.
  • Security incident investigations.
  • Anti-fraud protection for customers / clients with compromised data.
  • Insider data breaches.
  • Cyber extortion / ransomware costs.

Without Cyber Liability Insurance, small-business owners have to pay these costs out of pocket. With Cyber Insurance, you’ll have access to security consultants, crisis management experts, and resources to help you handle a breach efficiently.

Taking immediate action on a data security incident is key to minimizing cost and damage. Cyber Liability Insurance protects your financial security and puts you in a better position to handle a breach quickly and expertly.

Packaged Coverage at Discount Rate

-- with the Business Owner's Policy

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Which Cyber Incidents Are Covered

When most people hear the words “data breach” they think about malware and hackers – Cyber Liability Insurance may cover these incidents, but it can cover a number of other cyber risks, too.

If you work in data security, you know that it’s not always a malicious hacker you need to worry about. Sometimes it’s the end user. After all, a user’s mistake could lead to huge data breach. Fortunately, Cyber Liability Insurance may cover all kids of data security incidents, including…

  • Malware attacks.
  • DDOS attacks.
  • Ransomware.
  • Phishing schemes.
  • Insider data breaches.
  • Malfunctions leading to accidental disclosure.
  • Breaches caused by employee error.

How to Get Cyber Liability Insurance Quotes

Fill out an online insurance application for free quotes on Cyber Liability Insurance, Professional Liability Insurance, and other IT insurance coverages.

Cyber Liability Insurance Resources