8 Small Business Cyber Liability Insurance Coverage

1. Coverage for Data Breach Incidents

Cyber insurance is a good way to protect your business and your finances in the event of a data breach. It can cover ransom payments, data recovery costs, and customer notification, among other expenses.

Premiums for these policies vary widely based on several factors, including the sophistication of your company’s technology and its ability to avoid a data breach. Additionally, the size and annual revenue of your business are other considerations.

Depending on the policy, cyber liability coverage may also include a deductible. The deductible is the amount of money that you have to pay before the policy kicks in and starts paying.

The deductible is an important consideration because it can affect the premium you pay for the coverage. A higher deductible can help you secure a lower premium.

A data breach can cost a business millions of dollars, especially when it affects a large number of people’s personal information. This can have a major impact on your reputation, damage your ability to do business, and lead to lawsuits from affected individuals.

2. Coverage for Business Interruption Losses

In the event of a cyber event that causes an interruption in business, a cyber liability insurance policy can provide coverage for losses that arise as a result. These include revenue that an insured would have made had the business been open during a covered loss, normal operating expenses, and lost income taxes.

Coverage for business interruption loss claims can be complicated and require an effective presentation of the damage and its causes, along with detailed documentation to support a claim submission. It is important to work closely with IT, risk management, and legal departments in this process.

For example, if a business relies on cloud space or a processing utility for its operations, Contingent Business Interruption (CBI) loss coverage can cover lost income and operational costs when a service provider is unavailable to the insured because of a cyber event.

Business interruption coverage is an important component of any cyber liability insurance policy, and insurers should ensure that it provides adequate protection to meet their insureds’ needs. Insureds should also carefully review their cyber insurance policy language to determine whether or not CBI coverage applies to them.


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