Cyber Liability

Cyber Liability Insurance for Small Businesses

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Cyber Liability Insurance for Small Businesses

What is cyber liability insurance?

Cyber liability insurance provides coverage for certain losses incurred as result of data breaches. When customer data is compromised, it's usually not arbitrary or otherwise public information being targeted. Credit card data, names, phone numbers, addresses, driver's license numbers, health records, and even social security numbers can quickly find themselves in the wrong hands with a few strokes of the keyboard. Attacks can vary from malicious assaults on your physical servers and to phishing scams that solicit individual users for sensitive data. Cyber liability insurance can protect your company from a range of cyber attacks, and AmTrust is committed to evolving our coverage as new cyber threats emerge.

The extent of cyber liability coverage you may need will differ from business to business. At minimum, cyber liability insurance helps companies comply with state regulations that require a business to notify customers of a data breach involving personally identifiable information. AmTrust policies generally cover indemnification for legal fees and expenses, provide customer notifications in the event of a breach, and include the option to monitor the information of anyone impacted for a specified period of time. Policies may also cover costs incurred in the recovery of compromised data or the repair of damaged computer systems.

Aside from basic cyber liability coverage, AmTrust's cyber liability policy also includes coverage for Website Media Content Liability, Regulatory Defense and Penalties as well as PCI Fines, Expenses and Costs. For example, as your business expands into the digital and mobile space, our Website Media Content Liability coverage addresses the risks associated with any violations of privacy, plagiarism or piracy, copyright and trademark infringement, alleged defamation, libel, or slander relating to your website.

What is cyber privacy?

Cyber privacy is a subset of data privacy and data privacy laws. Cyber privacy refers to the idea that your customers have a right to personal privacy online. This privacy extends to the storing, repurposing, provisioning, and certain data collection methods you use to obtain and display data.

Cyber privacy can include both personally identifying information or non-identifying information, like a user's behavior on a website. Personally-identifiable information usually refers to information that can be used to identify someone. For example, a name and physical address could easily be used to identify an individual. Age, social security number, driver's license information, and telephone number are all examples of personally identifiable information.

Why do I need cyber liability insurance?

According to the 2016 Cyber Claims Study published by NetDiligence, the total cost of cyber and privacy-related claims last year topped $114 million. Personally identifiable information was the most reported data breach, with credit and payment card information being one of the most frequently stolen pieces of data.

Premiums on a cyber liability insurance policy that's designed to support your business's unique risks and budget will cost a fraction of the amount you could spend recovering from a cyber attack out-of-pocket. Maintaining liability insurance will help keep you operational after an attack, and it demonstrates to your customers that you care about their well-being and privacy.

The raw legal costs for being sued while uninsured or underinsured can be catastrophic, with the average claim for 2016 coming in at $665,000. For small and mid-sized businesses, not having cyber liability insurance in the event of an attack could threaten the basic sustainability of your business.

How do I get cyber liability insurance?

The basic process for buying cyber liability insurance takes three steps:

  1. Assess your risk.

Assessing your risk will help you understand the need to purchase cyber liability insurance. So, what's your risk? It depends on a variety of factors. If your normal business activities require you to collect, transmit, store, view or otherwise interact with personal information that hackers could use to identify a customer, then you probably need some form of cyber liability insurance.

Two tools that can help you quantify your cyber security risk exposure include the Framework for Improving Critical Infrastructure Cybersecurity from the National Institute of Standards and Technology and the Federal Financial Institutions Examination Council's Cybersecurity Assessment Tool (CAT). Both tools can be used to determine the kinds of cyber risks and level of exposure a business faces. CAT helps organizations determine absolute and relative risk in a measurable way by using an Inherent Risk Profile. You can also use our site to connect with a dedicated AmTrust agent who can help you determine the right amount of cyber liability coverage for your specific needs.

  1. Get your quote.

Once you establish your risk, you'll know what kind of coverage you need. The next step is to find out how much it will cost. You may wish to solicit quotes from several reputable insurance companies, but don't base your decision solely on the price. Not all companies offer the same benefits or coverages for the same premium. Review the quote to ensure it includes the specific policy options you need to cover your risk. Make note of any gaps or additional coverages included in the quote, and take these into consideration when you evaluate cost.

If you worked with an AmTrust agent to evaluate your unique risk, that agent will be able to provide a quote that exactly matches your needs.

  1. Fill out an application.

Once you've interviewed several companies, fill out an application with the company whose quote best fit your needs. An insurance agent should be available to help you fill out your application, answer any questions you may have, and get the underwriting process started.

If you choose AmTrust, our online application makes this part easy. Once you start your application, a dedicated AmTrust agent will be there to help you every step of the way, with direct access to underwriting that will help get your policy in place as soon as possible.

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