Why Cyber Liability Is a Must-Have for Businesses

Digital threats against sensitive client and company data are on the rise as technology evolves. While cyber liability insurance was considered a niche policy at one time, it’s quickly become a business essential. From small tech start-ups to retail chains, data breaches, hacking, and cyber extortion are very real threats to businesses, and their consequences can be financially devastating.

What Does Cyber Liability Insurance Cover?

Cyber liability insurance can help businesses recover from the financial costs of cyber incidents. The coverage typically includes the following:

• Cyber extortion—This may include ransom payments or negotiation support.

• Business interruption—This may assist with lost income due to your business being unable to perform typical operations.

• Legal defense—This can include financial assistance with lawsuits, settlements, and regulatory fines.

• Data breach response—This may include customer notifications, credit monitoring or investigations.

• Reputation management—This can include services to help rebuild trust in a businesses after a breach.

Why Should Businesses Invest in Cyber Liability Insurance?

Since cyberattacks are becoming more common, cyber liability insurance may now be considered a necessity in some cases. The following are reasons to invest in cyber coverage:

• Regulatory compliance—Certain laws require strict data protection, especially for businesses that handle sensitive client information, like hospitals and banks. Failure to have this coverage can lead to massive fines and lawsuits.

• Customer trust—Compromised data can have substantial negative effects on clients. Not only can cyber liability insurance assist in rebuilding that trust after a breach, but having a robust policy in the first place can inspire confidence in a business.

• Rising AI-driven risks—As AI becomes integrated into business operations, it’s also being used for nefarious purposes. Generative AI tools are being used to craft increasingly convincing phishing scams and malware, making a cyber liability insurance policy essential.

Contact Us

Technology can help businesses advance and streamline operations, but it can also leave businesses vulnerable to cyberattacks. Protecting your business data and information, as well as that of clients, is critical. Contact Erick Dodge Insurance Agency Inc in Longview, TX to discuss the unique needs of your business or for more information.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.