Cyber liability insurance for wholesalers and distributors

A data breach can be devastating for a small wholesaler, especially if your customers' payment information is compromised. State laws might require you to notify all affected customers, or provide them with credit monitoring services.

These costs add up quickly. You might also have to pay for a data breach investigation, cyber extortion demands, and data recovery.

That's why businesses that store credit card numbers and other personal information need cyber liability insurance. This policy helps pay for costs related to data breaches and cyberattacks, and provides essential support and resources.

This policy provides coverage related to:

• Data breaches
• Cyberattacks
• Ransomware
• Phishing
• Malware
• Denial of service (DOS) attacks
• Other cyber incidents that disrupt business and expose personal information

Wholesale distributors typically need first-party cyber liability coverage, which provides financial protection against cyber threats at your own business. For example, it would help your business recover after a hacker accessed your customers' credit card numbers.

This type of coverage is also called data breach insurance. Small businesses owners can often add it to their general liability insurance or business owner's policy (BOP).

Another type, third-party coverage, is recommended if you're responsible for another business's cybersecurity. For example, if you're hired to help another wholesaler set up shop and you recommend insecure software, this policy would protect you from legal costs.

Cyber liability insurance can help pay for:

• The cost of notifying customers affected by a data breach
• Providing credit monitoring services to affected customers
• Public relations campaigns to aid your business's recovery
• Business interruption losses related to cyber crime
• Cyberextortion payments
• Data breach investigations and other recovery activities

Data breaches are expensive, and owning a small business doesn't mean you're safe from hackers. Small companies are often targeted by cybercriminals because they have fewer security measures in place. On top of that, simple accidents by employees – such as opening a phishing email – are a common cause of data breaches.

While cyber liability insurance covers common cyber risks, it does not offer complete protection. Injuries or theft can affect any wholesale business. Other insurance policies for wholesalers to consider include:

General liability insurance: This policy covers the most common lawsuits faced by wholesalers, including customer injury and property damage claims.

Workers’ compensation insurance: Workers' comp is required in almost every state for wholesale businesses that have employees. It covers medical expenses for work-related injuries.

Business owner’s policy (BOP): This policy combines general liability coverage and commercial property insurance, usually at a lower rate than if the policies were purchased separately.

Commercial umbrella insurance: Similar to excess liability insurance, this policy boosts coverage on a wholesaler’s general liability, employer’s liability, and commercial auto insurance policies.

Commercial auto insurance: This policy covers vehicles owned by your business. It typically pays for accidents and damages related to theft, weather, and vandalism.

Surety bonds: This bond assures a wholesale business’s clients that an insurance company will reimburse their losses if the business fails to fulfill a contract.

Are you ready to safeguard your wholesale business with cyber liability insurance or another type of business insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.