How To Know If Your Business Needs Cyber Liability Insurance

Sherri Ramos

A cyber attack can be very expensive due to the loss of data and the potential litigation your company might face. The best way to avoid this is to take measures to stop cyber attacks. However, you may also need to consider how much cyber liability insurance you will need to pay for all the expenses associated with the cyber attack.

The Cost of a Cyber Attack

Cyber liability insurance will cover various costs associated with suffering a cyber attack. This includes the cost of hiring an expert to help you with responding to the breach, the cost of informing customers about the breach, and any other expenses such as new equipment you must purchase or third-party services you might need.

Legal Expenses

If a customer suffers financial damages as a result of the cyberattack, you may be forced to go to trial. Under these circumstances, you might need to hire a lawyer, pay for a judgment if you lose a court case or settle your case out of court. A cyber liability insurance service will pay for all of these damages.

Liability Insurance Coverage

The amount of cyber liability insurance you will need depends on how much risk your company is exposed to. For example, if your company is operated primarily online and if you store a large amount of consumer data, you may need to purchase more cyber liability insurance. 

Damages Your Customers Might Suffer

The type of data you store is also significant. For example, your business might store:

  • Personal information
  • Bank account information
  • Credit card information

When a customer has any of the above information stolen, this can have a significant impact on their life. As a result, you will need to do everything possible to safeguard their data, and you will also need cyber liability insurance in case your business needs to compensate the customer for damages they have suffered.

In addition to the loss of privacy, you may face a lawsuit over a breach of contract. Your customer might allege that you were negligent when safeguarding the data. Regardless of whether or not you are found to be negligent, you will need liability insurance to make sure that you can pay for any legal expenses.

Any Business Might Need Cyber Liability Insurance

A cyber attack can happen to any business that uses the Internet. For this reason, cyber liability insurance is necessary so that the risk can be distributed among numerous businesses that carry this type of insurance.