Cyber Liability Coverage
Data breaches are now a fact of life together with taxes and death, but how can businesses better manage the risks related to a data breach and reduce the significant cost that can result from them?
The best approach is to shift the risk and buy insurance.
Cyber liability insurance coverage (CLIC) has been available in the market for around 10 years, but it has really taken center stage after recent high profile news stories like the Target breach.
In the United States, 46 of the 50 states have mandatory requirements for data breach notification. These mandatory data breach notification regulations are a large driver for CLIC as the costs of notifying affected users can be extremely high.
What is cyber liability insurance cover (CLIC)?
The term “cyber liability insurance coverage” is often used to describe a range of coverage that can include:
Data breach/privacy crisis management coverage. For example, expenses related to the management of an incident, the investigation, the remediation, data subject notification, call management, credit checking for data subjects, legal costs, court attendance, and regulatory fines.
Multimedia/Media liability coverage. Third-party damages covered can include specific defacement of website and intellectual property rights infringement.
Extortion liability coverage. Typically, losses due to a threat of extortion, professional fees related to dealing with the extortion.
Network security liability. Third-party damages as a result of denial of access, costs related to data on third-party suppliers and costs related to the theft of data on third-party systems.
Some of the elements of cyber-liability coverage may be interconnected or overlap with coverage from existing products, including those for business continuity, third-party supply chain issues, and professional indemnity. Even if this overlap does exist, a decent cyber-liability policy will ensure cyber risks are fully addressed.