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What is Cyberliability Insurance?

A Chubb Group survey recently found that 2 in 5 companies suffered from a computer security issue in a 12-month period, with the typical data breach costing $5.5 million in organizational costs for 2011. About a quarter of the respondents expect another major incident this year. Yet, 65 percent do not have the proper cyberliability insurance to respond to their exposures. In the study it finds that the most likely reason for the omission is that most people don’t know what cyberliability is and that insurance protection exists for it. Further, most buyers don’t understand that the insurance policies vary greatly from carrier to carrier.

Cyberliability refers to the risks that your company faces from the operation of your network. The exposures include first and third party risks. It could involve risks to your company when information is compromised. or it may involve a virus entering your system and destroying your product data, a hacker stealing the customer credit card numbers stored in your database. It could also include a third party suing you for inadvertently putting a copyrighted picture on your website without permission.

When such incidents happen, at the very least, you’ll spend time and money to restore information, eliminate the threat, and perhaps, deal with any public relations fallout. Your company may also need to compensate third parties for any damages they suffered because of your computer problems.

Although specific policies differ, your traditional business insurance does not generally cover cyberliability. The and legislation to deal with computer security is rapidly changing and still evolving. You need a policy that specifically addresses your cyberliability exposures.

Please contact a TechAssure member to learn more about the insurance and risk management options available to your firm.

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