Frequently asked questions about cyber liability insurance

Cyber liability insurance isn't required by law, but some clients may require you have it before they will hire you. This policy provides key coverage that could protect your business from bankruptcy if a client files a cyber liability lawsuit against your business.

Because of the increasing high risk of data breaches and cyberattacks, every small business should seriously consider purchasing cyber liability insurance.

There are two types of cyber liability coverage: first-party and third-party.

First-party coverage can help pay for recovery from a data breach or cyberattack at your business. It covers the cost of paying ransoms, investigating the breach, and notifying customers.

Third-party coverage offers protection if a client sues you for failing to prevent a data breach or cyberattack at their business.

Learn more about the differences between first-party and third-party cyber liability insurance.

Cyber liability insurance covers the immediate costs of a data breach or cyberattack, such as:

• Ransoms for retrieving data
• Hiring an expert to investigate the breach and assist with regulatory compliance
• Notifying customers about the breach
• Crisis management and public relations

It also covers the legal costs of lawsuits related to a data breach or cyberattack, such as:

• Legal defense if a client blames your business for failing to prevent the incident
• Judgments, civil awards, or settlements from these lawsuits

Yes, errors and omissions insurance can include cyber liability coverage. This package is called technology errors and omissions insurance, or tech E&O.

This bundle typically includes both first-party and third-party cyber liability insurance, and is often less expensive than purchasing each coverage separately.

Yes. Even if your business wasn't at fault, you may be sued by a client who believes your company failed to prevent a data breach. Cyber liability insurance covers your legal expenses and settlement, even if the lawsuit never makes it to court.

The average cost of a cyber liability policy is $145 per month. However, you could pay more or less depending on liabilities specific to your business.

To determine your insurance premium, your insurance provider will take into account your level of risk and claims history. The deductible, policy limits, and type of coverage you select will also affect your rate.

It may be tempting to simply go with the least expensive quote, but make sure you also take into account:

• The premium (how much the policy costs)
• The policy limits (the amount it will pay per claim or per year)
• The deductible (the amount paid before you can make a claim)
• Coverage (some cyber liability policies may offer more extensive coverage)

Learn how much cyber liability insurance your business needs.

With TechInsurance, you can compare quotes from top-rated insurance providers. This offers you an easy way to save money on cyber liability insurance.

Beyond comparison shopping, you can also save money on insurance by:

• Bundling policies for a discount (e.g., technology errors and omissions insurance)
• Choosing low policy limits
• Choosing a high deductible
• Managing risks to avoid claims
• Communicating with your clients

Learn more ways to save money on cyber liability insurance.

TechInsurance is a trusted insurance expert for all small businesses, including startups, limited liability companies (LLCs) and freelancers, with extensive knowledge of the technology sector.

Technology professions that commonly partner with TechInsurance for their insurance needs include:

• Software developers
• App developers
• IT consultants
• Cybersecurity professionals
• Computer repair and service businesses

Because it's often written as a claims-made policy, cyber liability insurance only covers a claim if the incident and resulting lawsuit happen while the policy is active.

That's why it's important to maintain uninterrupted coverage, because long stretches of time may pass between an incident and the resulting lawsuit in states that have lenient statutes of limitations.

Most small businesses purchase a cyber liability policy early on and maintain the policy for the life of their business, so there are no gaps in coverage.

If you think your business might be exposed to risk now or in the past because you’ve let a prior policy lapse, bring it up with your insurance agent. There may be ways to extend your protection.

It takes just a few minutes to complete our online cyber liability insurance application. In most cases, we’ll show you quotes as soon as you finish the application. A licensed TechInsurance insurance agent can talk through your options with you before selecting the policy of your choice.

Once you purchase a policy, we’ll email you a cyber liability certificate of insurance. The certificate of insurance is the formal proof of insurance you need to show when you apply for professional licenses or sign contracts.

Our cyber liability insurance application requires basic information about your business, such as its location, number of employees, and estimated revenue. When you finish the application, you'll receive quotes from our network of top-rated insurance companies.

From there, you can look them over and pick the one that works best for you. If you need help, one of our licensed insurance agents is happy to assist you.

Once you’ve paid for your cyber liability policy, there are two ways to obtain an ACORD certificate of liability insurance with TechInsurance:

• We can email you your cyber liability insurance certificate
• You can access your certificate of insurance by logging into your account

This form is the proof of insurance required by client contracts and applications for certain professional licenses.

To make a cyber liability insurance claim, contact your insurance provider directly. They will ask for:

• A description of the incident
• Basic information about your business
• Your policy number

Your insurance agent can help guide you through the process and answer any additional questions.

To change the coverage limit of your cyber liability insurance policy, simply contact your TechInsurance agent at any time to see all your options.

Your agent can adjust the policy limit to give you more or less coverage. We can also help if you need to purchase other insurance policies for your business.

If you cancel your cyber liability insurance policy before it expires, you run the risk of paying more for the same policy later. Insurance companies typically charge higher rates to businesses that cancel policies.

Because cyber liability is a claims-made policy, it provides coverage only if the incident takes place and the lawsuit is filed while the policy is active. In some cases, years can pass before a client decides to sue over an incident. Keeping your policy active ensures you’re protected against clients who sue at a later date.

Read more about what you should consider before canceling a policy.

Cyber liability coverage protects against the costs of dealing with a cyberattack or data breach at your business. This is known as first-party liability insurance because it directly impacts your business. It can often be added to your general liability insurance, a business owner’s policy, or a technology errors and omissions policy.

Technology E&O combines cyber liability and errors and omissions coverage into one bundle. This policy insures against third-party liabilities, such as when a customer accuses you of negligence that led to a data breach on their own system.

Electronic data liability insures you against data loss when there’s physical damage to or loss of your tangible property, such as a computer or hard drive.

Cyber liability insurance covers you in case of cyberattacks and data breaches, where the damage is digital rather than physical.