Does General Liability Insurance Cover Cyber Liability?

A basic general liability insurance policy is usually not going to include cyber liability protection. While cyber liability is a more prevalent issue now than it used to be, it’s still not quite considered a universal concern. Furthermore, cyber liability covers a different area of business than general liability does.

Fortunately, most companies that sell general liability insurance will also sell cyber liability insurance, so it’s not hard to add this protection go your policy.

What Exactly Is Cyber Liability?

Cyber liability insurance covers you against cybercrimes, data breaches and information leaks. Your insurer will help you to pay for legal fees, and will help you to manage the fallout of a breach, which may include:

·        Alerting customers affected by the data breach

·        Covering losses suffered by customers

·        Repairing a computer system affected by cyber-crime

·        Identity recovery, helping your customers to correct issues arising from identity theft

Do You Need Cyber Liability Insurance?

For some small businesses, cyber liability might not be a necessity. If you run a small food truck, for instance, and mostly accept payments in cash, you might not have much risk in that regard. Any liability may fall on the people processing the few credit card transactions you do process. Many small businesses only accept payments in cash to ensure that they don’t have any cyber liability concerns to worry about.

Cyber liability insurance is most important to people who have a database of customers. If you run an eCommerce website, for example, people are trusting you with email addresses, passwords and social security numbers — everything a hacker needs to commit identity theft. A breach of that data can rack up hundreds of thousands of dollars in losses and legal fees, even for a small business. For a medium or large sized business, that number can quickly reach seven figures.

Put simply: If you store sensitive data in any way, you need cyber liability insurance. Whether you store data on a website or a device on the premises of your business, cyber liability insurance could save your business in the event of a breach.