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Cyber Liability Insurance
Gain protection against cyberattacks and data breaches.
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Frequently asked questions about cyber liability insurance

After a data breach or cyberattack, cyber liability insurance compensates your tech business for any costs related to the incident, including lawsuits filed by your clients. Find answers to common questions about this policy.

Cyber liability coverage and requirements

Does my tech business need 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 high risk of data breaches and cyberattacks in the technology industry, every tech business should seriously consider purchasing cyber liability insurance.

What’s the difference between first-party and third-party cyber liability insurance?

There are two types of cyber liability coverage: first-party and third-party. Most cyber liability insurance policies for tech businesses include both types of coverage.

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.

How does cyber liability insurance protect my business?

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

Learn more about cyber liability insurance coverage.

Does my errors and omissions insurance include cyber liability coverage?

Errors and omissions policies for tech companies usually include cyber liability coverage. The package is called technology errors and omissions insurance, or tech E&O.

Insurance providers recognize that data breaches are a major professional risk for the tech industry. These bundles typically include both first-party and third-party cyber liability insurance.

Learn more about what tech E&O includes.

Does cyber liability insurance cover frivolous lawsuits?

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.

Compare small business insurance quotes for your company

Cyber liability insurance costs

How much does cyber liability insurance cost?

It depends, since your cyber liability policy will cover liabilities specific to your business. To determine an 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.

Learn more about the cost of cyber liability insurance.

Which quote should I choose?

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.

How can I save money on business insurance?

With TechInsurance, you can compare quotes from several carriers, which is an easy way to save money on business insurance. Beyond comparison shopping, a business owner looking to save money on insurance can also:

Explore more ways to save money on business insurance.

How to purchase cyber liability insurance

Does TechInsurance cover my industry?

TechInsurance specializes in small business insurance for the technology industry, including businesses in a wide range of sectors. Learn more about the types of tech businesses we work with.

When should I buy cyber liability insurance?

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 new tech 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.

How quickly can I get insurance coverage with TechInsurance?

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.

When you purchase a policy, we’ll email you a certificate of insurance right away. The certificate of insurance is the formal proof of insurance that you need to show when you apply for professional licenses or sign certain contracts.

What information do I need to fill out an insurance application?

Our business insurance application asks for basic information about your company, such as its location, number of employees, and estimated revenue.

When you finish the application, you'll receive quotes from multiple carriers. Look them over and pick the one that works best for you. If you need help, a licensed insurance agent is available to assist you throughout the process.

Cyber liability insurance policy changes and claims

How do I make a cyber liability insurance claim?

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.

Can I increase the policy limit on my current policy?

To change the policy limit of your cyber liability insurance policy, simply contact your TechInsurance agent at any time to see all your options. The agent can adjust the policy limit to give you more or less coverage, and provide assistance if you need to purchase additional insurance policies for your business.

What happens if I cancel my current policy?

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

Because cyber liability is often a claims-made policy, it only provides coverage if both 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.

That's why it’s important to keep your policy active to ensure you’re protected against clients who sue at a later date.

Updated: March 21, 2022