What is Cyber Insurance?As businesses become increasingly reliant on digital data and communications, protecting against the associated risks is becoming more and more important. Cyber insurance policies help Massachusetts businesses shield themselves from some of the risks that come with using digital information.
Despite their importance, cyber policies remain a fairly new type of insurance. There isn’t yet a uniform set of protections that all policies provide, and the terms and conditions within policies can vary quite a bit. For this reason, it’s particularly important to work with an insurance agent who specializes in cyber insurance when selecting a policy.
What Massachusetts Businesses Need a Cyber Liability Insurance Policy?
Most Massachusetts businesses today use digital information and therefore, may benefit from having a cyber liability policy. Just some examples of businesses that might want the protections that a policy offers include:
- Doctors offices, medical clinics and hospitals that must keep digital charts
- Legal practices that keep confidential information digitally
- Banks, credit unions and investment firms that conduct transactions digitally
- Ecommerce websites and traditional retailers that collect credit card numbers
- Real estate agencies that send and receive documents digitally
In addition to for-profit businesses, many government agencies and nonprofit organizations also may want a policy.
What Coverages Are Available Through Cyber Liability Insurance Policies?
While the coverage options vary from policy to policy, most policies offer a variety of protections that businesses can choose from. Some of the coverages that businesses might want to look for include:
- Network Security Liability Coverage, which frequently overs malicious online attacks
- Extortion Liability Coverage, which frequently covers ransomware attacks
- Privacy Liability Coverage, which frequently covers non-criminal data breaches
In addition to these, businesses that specialize in cloud-based services or other IT work may also want errors and omissions coverage. Although E&O coverage is available through several different policies, cyber liability policies sometimes have E&O coverage that’s particularly well-suited for online and IT work.
Do Cyber Liability Insurance Policies Offer Protection Against Ransomware Attacks?In a ransomware attack, malicious attackers seize data and refuse to release it until a ransom is paid. These attacks are occurring with increasing frequency, and they can be extremely expensive to recover from. One attack locked a hotel’s guests out of their rooms until a $17,000 ransom was paid. Attacks have also targeted hospitals, retailers and other businesses.
As noted, extortion liability coverage sometimes covers these types of attacks. Businesses that specifically want protection against ransomware threats should work with an experienced agent to find a cyber liability insurance policy that has robust extortion liability coverage. An experienced agent will be able to explain precisely what types of attacks a particular policy's coverage will protect against.
What Expenses Are Covered By Cyber Liability Insurance Policies?
Just as their coverages vary, the expenses that cyber liability policies will reimburse for also differ from one policy to the next. Depending on a specific policy’s terms and conditions, it might help pay for:
- Lost revenue if an incident stops or slows operations
- Lost revenue if an incident results in a tarnished reputation
- Reparations if a business must compensate customers or clients
- Credit monitoring if a business must provide monitoring for affected parties
- Identifying and fixing a vulnerability if attackers exploited one