Cyber liability insurance, also called cybersecurity insurance, protects small businesses from the high costs of a data breach or malicious software attack. It covers expenses such as customer notification, credit monitoring, legal fees, and fines.
Cyber insurance safeguards your consulting business when sensitive data is stolen or compromised. If a hacker steals Social Security numbers, credit card numbers, or other personal information, you could be held liable. Cyber liability insurance can cover expenses from a client lawsuit and other costs related to the breach.
After a data breach or cyberattack, this policy can help pay for:
There are two kinds of cyber liability insurance: first party and third party.
First-party cyber liability insurance covers data breaches at your own business. For example, a hacker could steal clients’ Social Security numbers from an HR consultant’s database. First-party cyber liability can cover expenses related to:
When a client suffers a data breach or cyberattack, you could face a lawsuit if they believe you were negligent in preventing it. For example, a marketing consultant could recommend insecure software to a client who later suffers a breach and sues their business.
Third-party cyber liability insurance protects your business from expenses related to a client’s lawsuit, such as:
IT consultants and other consultants who work in the technology industry can sometimes bundle third-party cyber liability insurance with professional liability insurance (also called errors and omissions insurance or E&O). Both policies protect against accusations of negligence. The package is called technology errors and omissions insurance, or tech E&O.
Cyber liability insurance provides crucial protection for companies that handle sensitive data, but it doesn't cover bodily injuries, property damage, and other common risks. Other recommended policies for consultants include:
Professional liability insurance: This policy covers legal costs related to business mistakes or decisions that resulted in revenue loss and legal action by a client. It's sometimes referred to as errors and omissions insurance (E&O).
General liability insurance: This policy covers expenses related to common accidents, including third-party injuries, accidental damage to client property, and advertising injuries.
Workers' compensation insurance: Workers' comp covers medical costs if a consultant suffers a work-related injury, such as tripping in the office and breaking a wrist. Most states require this coverage for businesses with employees.
Fidelity bonds: Fidelity bonds provide reimbursement if one of your employees steals from a client. They are often required for client contracts.
Are you ready to protect your consulting firm with cyber liability insurance or another policy? Complete Insureon’s easy online application today to compare quotes from top U.S. insurers. Once you find a policy that fits your needs, coverage can start in less than 24 hours.