Cyber Liability Insurance in Florida: What Businesses Need to Know
Almost every business today relies on computers, email, online systems and electronic data. That also creates the potential for cyber risks such as ransomware, phishing, data breaches, cyber fraud and network attacks.
Cyber Liability Insurance, also called cyber insurance, can help a business respond to and recover from certain losses caused by a covered cyber incident. The coverage varies significantly by policy, so understanding what is actually included is important.
What Does Cyber Liability Insurance Cover?
Cyber insurance can include both first-party and third-party coverage.
First-Party Cyber Coverage
First-party coverage generally addresses the business's own expenses following a covered cyber incident.
Depending on the policy, coverage may include:
Data recovery and restoration
Forensic investigation
Legal expenses
Customer notification
Credit monitoring or call-center services
Cyber extortion and ransomware
Business interruption losses
Crisis management and public relations
Certain cyber fraud losses
The exact coverage, limits and exclusions depend on the policy.
Third-Party Cyber Liability
Third-party coverage generally addresses claims made against your business by customers, clients or other parties following a covered cyber incident.
Depending on the policy, it may help with:
Lawsuits and settlements
Claims from affected individuals
Regulatory response
Legal defense
Certain damages and judgments
This can be particularly important for businesses that collect or store customer information.
What Types of Cyberattacks Can Affect a Business?
Cyber incidents don't only happen to large corporations. Small businesses can also be targeted.
Common examples include:
Phishing: An employee receives a fraudulent email designed to steal passwords, financial information or access to company systems.
Ransomware: Malicious software locks or encrypts business files and systems, with criminals demanding payment.
Data Breaches: Unauthorized access exposes customer, employee or other sensitive information.
Social Engineering: A criminal impersonates an employee, customer or vendor to trick someone into transferring money or providing sensitive information.
Does General Liability Cover Cyberattacks?
Not necessarily.
A standard General Liability policy is designed primarily for traditional liability exposures such as third-party bodily injury, property damage and certain personal or advertising injury claims.
Cyber risks can involve specialized expenses such as forensic investigations, notification costs, data restoration, cyber extortion and business interruption. A separate Cyber Liability policy may provide coverage specifically designed for these exposures.
Businesses should review their existing policies rather than assume cyber coverage is included.
Who Should Consider Cyber Insurance?
Cyber insurance can be worth considering for almost any business that:
Stores customer information
Accepts credit cards or online payments
Uses email for business
Stores information electronically
Relies on computer systems to operate
Uses cloud-based software
Has employees accessing company networks
Works with vendors that have access to business data
Even a small business can experience significant disruption following a cyber incident.
Cybersecurity and Cyber Insurance Work Together
Insurance is only one part of managing cyber risk.
Businesses should also use strong passwords, multi-factor authentication, regular software updates, secure backups and employee cybersecurity training. The FTC recommends businesses have plans for responding to and recovering from cyber incidents.
How Much Cyber Insurance Do You Need?
There isn't one coverage limit that works for every business.
The appropriate amount can depend on:
Type and amount of data stored
Number of customers
Annual revenue
Industry
Payment processing
Dependence on computer systems
Cybersecurity controls
Contract requirements
Potential business interruption exposure
Cyber policies can also have different deductibles, sublimits and exclusions, so comparing the coverage rather than just the premium is important.
If you own a business in Vero Beach, Sebastian, Fort Pierce or throughout the Treasure Coast, Safeguard Insurance can help you review your Cyber Liability Insurance options and determine what coverage may fit your business.
Cybersecurity can help prevent an attack. Cyber insurance can help your business respond when a covered incident happens.