Nearly every business today has a Website, stores sensitive client and employee information, and conducts business over the Internet.
They all face increased exposure to computer attacks, viruses and security breaches as a result. This has created a demand for expanded insurance coverage commonly referred to as “Cyber Liability.”
Traditional coverage forms alone – including Property, General Liability, Crime and Errors & Omissions (E&O) – typically fall short of covering information and network related risks. In fact, if you check a typical policy’s “exclusions” you may find language similar to the following examples:
Under Property Not Covered: Electronic data, “Electronic data means information, facts or computer programs, stored as or on, created or used on, or transmitted to or from computer software (including systems and application software), on hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other repositories of computer software which are used with electronically controlled equipment.”
Under the Liability Section, under Perils Excluded: Computer Virus or Computer Hacking – “We do not pay for: 1. any direct or indirect loss or damage or, 2. loss of access, loss of use, or loss of functionality caused by a `computer virus` or by `computer hacking`”. There could be other Exclusions in the Personal and Advertising Injury Section.
If your business uses computers that are attached to the Internet for email, a Website, or other business purposes – you need a Cyber Liability policy that will cover damage to yours or others intangible property. Coverage is now available to fill the gaps by providing first- and third-party cyber risk coverage to address a broad range of exposures. This coverage is typically very affordable – and priceless compared to what costs could be incurred in the case of a data breach!