Although cyber liability insurance is of critical importance for businesses, there are some things it generally doesn't - or can't - cover. For example, once intellectual property is compromised or a company's reputation is damaged, it's hard to rebound; however, many experts believe there are some risk management tactics business can use to make sure data breaches don't affect uninsurable assets, reported Business Insurance.
The website said each data breach can cost a business more than $200 per compromised record, to pay for things such as credit monitoring, notification, forensics, defense, call center services to deal with questions from customers who’ve been affected, or the high costs of mitigating the PR crisis associated with a data breach.
Some of these costs are not covered by insurance, making a data breach even more costly for businesses, said the site.
Insurance pro Emily Freeman told the site that policies for cyber liability are intended to cover personally identifiable information not available to the public that could initiate an investigation. However, these policies do not cover loss from customers ceasing to do business with a company because they no longer trust that their data is safe.
Depending on the processes of a given business, insurance policies can also cost businesses varying amounts of money, reported the Southern Business Journal. Covering different liabilities are important for companies that take part in separate processes, meaning that companies will likely have to have a number of policies to cover such things as workers compensation and general liability. However, nearly every business has begun to utilize computers for some of their processes, meaning that cyber liability insurance is gaining importance. It can be especially important for tech companies, as the reputation of these companies is built on their web savvy, and a data breach can seriously erode credibility.