New Perils in a Connected World – What to Look for in Cyber Liability Policies

When it comes to Cyber Liability policies it is very important to understand that one size does not fit all! In the past few years some comprehensive cyber liability policies have come to the marketplace so for most businesses a carefully chosen policy will be just fine. However, if you are hosting other business’ websites, heavily data dependent and or storing sensitive Personal Identification Information or health information on your servers it is unlikely that one cyber policy will get the job done for you. I recommend that you get in touch with an insurance agent that understands Cyber Risks. That said, there are some important things that you should look for in a policy and this article will focus on highlighting some of the more important policy provisions to look for. I will leave it up to you and your agent to decide what provisions are most important to you and meet your budget.

Key policy provisions in Cyber Liability polices

1. Data Breach
2. Virus and Malware
3. Publishing Liability

Data Breach

First Party Costs
o Notification/Credit monitoring
o Public relations
o Extortion
o Terrorism
o Network damage
o Loss of digital property
o Enhancements in security
o Contractual liability in absence of a contract
o Allocation of covered and non covered claims
o Innocent mistakes
o Rogue employees
o Regulatory fines and penalties

Third Party Costs
o Privacy of employees
o Privacy of Customers
o Legal expenses
o Arbitration
o Cover for independent contractors
o Non-monetary damages only
o Innocent mistakes
o Assumed liability by contract

Virus and Malware

First Party Costs
o Network damage
o Business Interruption
o Enhancements in security
o Innocent mistakes

Third Party Costs
o Business Interruption
o Loss or damage to digital property

Publishing Liability

Defense and Settlement costs for
o Copyright infringement, slogan, trademark, trade name or service name
o Libel, slander or defamation, product disparagement or emotional distress
o Invasion of privacy
o Plagiarism, failure to attribute
o Misstatement or misleading statement
o Failure to follow published privacy policy
o Wrongful entry or eviction
o Contextual errors and Omissions

Miscellaneous issues
o Defense costs within the limits

Stew Nelson blogger on the New Perils in a Connected World

o Claims Made or Occurrence
o Punitive Damages
o Territory

Please use this “Check List” and sit down and have a frank conversation with your insurance professional before you have an uncovered cyber claim. To date, forty-six states have privacy regulation on the books and HIPPA and HITECH regulations have put some teeth behind penalties for violations of privacy and inadequate network security. Don’t get bit

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