Cyber liability insurance, also called cyber security 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.
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Cyber liability insurance safeguards your 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’ credit card numbers from a SaaS company's database. First-party cyber liability can cover expenses related to:
You may also see this coverage referred to as data breach insurance.
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, your network security company could set up cybersecurity for a client who suffers a breach and sues your business.
Third-party cyber liability insurance protects your business from expenses related to the client’s lawsuit, such as:
Technology, web, and IT businesses that need third-party cyber coverage usually bundle it with errors and omissions insurance. Both policies protect against accusations of negligence. The package is called technology errors and omissions insurance, or tech E&O.
Most IT businesses pay a median of $145 per month for cyber liability insurance, but you could pay more or less depending on your risks.
Insurance costs for technology professionals are based on a few factors, including:
While cyber liability insurance covers some of the biggest risks in the IT industry, it does not provide complete protection. Technology professionals should also consider:
General liability insurance: This policy can cover expenses related to client injuries and property damage, along with advertising injuries like slander. Technology businesses can often bundle it with commercial property insurance for savings in a business owner’s policy.
Errors and omissions insurance: This policy is critical for IT consultants and other professionals who provide expert advice. Also called professional liability insurance, it can cover lawsuits related to work performance, such as a mistake that crashes a client’s server.
Fidelity bonds: Data breaches can happen internally, too. An employee could jeopardize your business by engaging in unlawful access of sensitive information, theft, or fraud. Fidelity bonds safeguard your business when an employee engages in certain criminal acts.
Workers’ compensation insurance: Most states require technology businesses with employees to purchase workers’ compensation. This policy covers medical bills and partial lost wages from work-related injuries and illnesses.
Commercial auto insurance: This policy is required for business-owned vehicles. It can cover property damage and medical bills in an accident involving your IT company vehicle, along with theft, vandalism, and weather damage.
Are you ready to protect your technology business with cyber liability insurance? Complete Insureon’s easy online application today to compare quotes from top U.S. carriers. Once you find a policy that fits your needs, coverage can start in less than 24 hours.