Cyber and Privacy insurance is designed to cover the risks involved in using technology services or products. More specifically, Cyber and Privacy policies are intended to cover both liability and property losses that can happen when a business engages in electronic activities like selling on the internet, or collecting data within its internal network.
Most notably (but not exclusively), Cyber and privacy policies cover a business’ liability for a data breach, in which the customers’ personal information (like credit card or Social Security numbers) is exposed or stollen. The policies cover a variety of expenses associated with data breaches, including
- Notification costs
- Credit monitoring
- Costs to defend claims by state regulators
- Fines and penalties
- Loss resulting from identity theft
For example, let’s say your business has customers’ credit card information stored on an internal server. If you’re hacked, you’ll likely have to pay a ransom to the hacker, damages to your clients, and legal costs of recovering the data. Cyber and privacy insurance would kick in and help alleviate those burdens.
Additionally, the policies can cover liability arising from website media content, and property exposures from business interruption, data loss/destruction, computer fraud, funds transfer loss, and cyber extortion.
Cyber and Privacy insurance is often confused with Technology Errors and Omissions (tech E&O) insurance. The difference between the two, is that Tech E&O covers the providers of technology products and services (like computer software and hardware manufacturers, website designers, and firms that store corporate data on an off-site basis). Cyber and Privacy insurance covers the users of such products. However, the two contain a number of the same insuring agreements.
To find out whether your business could benefit from Cyber and Privacy Insurance, check out our article with MBO Partners:
How Do I Know If I Need Cyber Insurance?
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