Cyber liability coverage protects businesses against liability and expenses arising from the theft or loss of data, as well as liability and expenses arising from a breach of data security or privacy, particularly when you are storing client information--client social security and credit card numbers, financial information, medical and legal records, and all other confidential infomation as protected by the Privacy Act of 1974. Cyber liability insurance policies typically include coverage for:
- Denial of service attacks or inability to access websites or systems
- Unauthorized access to, use of, or tampering with data
- Disclosure of confidential data (invasion of privacy)
- Loss of data or digital assets (malicious or accidental)
- Introduction of malicious code or viruses
- Cyber extortion or terrorism threats
- Personal media injury (defamation, libel, or slander) from electronic content
- Regulatory action, notification, or defense expenses
- Crisis management and public relations expenses
- Data or system restoration
- Business interruption expenses
The costs associated with theft or misuse of client data can be immense: The average cost to a U.S. business for a data breach in 2009 was $6.7 million, according to the Ponemon Institute, a research center dedicated to privacy, data protection, and information security policy. Losses can include direct costs involved in investigating what happened, notifying those affected, credit monitoring, litigation, and government fines, as well as indirect costs such as lost business and damage to the company’s reputation and stock price.
A special form of commercial insurance created to protect businesses against cyber (Internet) risks, such as hackers and other breaches of computer system security. Cyber insuance covers exposures to loss faced by organizations that conduct business online, particularly loss caused by unauthorized entry into their systems by hackers.