Businesses face new risks that have emerged as commerce has increasingly moved online, and these risks will only become more and more problematic as cloud usage continues to grow. One way that Massachusetts businesses can protect themselves from many of the online risks they face is by purchasing cyber insurance.
Cyber insurance policies help protect businesses against modern risks associated with online commerce. This is one of the most effective ways to insure against data breaches and online attacks.
What businesses in Massachusetts should carry cyber liability insurance?
The vast majority of Massachusetts businesses can benefit from cyber liability insurance, regardless of their size or industry. This is an insurance that has wide application as online risks grow.
To see just how widely applicable this insurance is, consider how businesses in different industries face online risks:
Gas Stations could have scammers install skimmers on pumps’ credit card readers
Investment advisors could have clients’ financial information stolen during an attack
Attorneys could accidentally send confidential client information to opposing counsel
Medical providers could mishandle electronic health records and violate HIPAA
Remote businesses could have data compromised if a device is forgotten in public
In all of these situations, the business might allegedly or actually be financially responsible for harm that results from the incident. Cyber liability may help defray the costs associated with an allegation or determination.
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What coverages can businesses get through cyber liability insurance policies?
Most cyber liability policies offer multiple coverages, although there can be variances among policies’ coverage options because this is still a comparatively young type of insurance. Some coverages that businesses could look for are:
Employee Privacy Liability Coverage, which may cover employees’ personal details (e.g. SSN’s, direct deposit accounts) if they’re compromised
Network Security Privacy Liability Coverage, which may cover data breaches that result in a violation of federal or state regulations (e.g. HIPAA)
Electronic Media Coverage, which may cover trademark infringement, plagiarism and defamation claims arising from published digital content
Businesses that rely on cloud services or software vendors may want some of these coverages extended to vendors’ work. Should a vendor suffer an online attack or data breach, affected parties might seek compensation from both the vendor and the business that hired that vendor. Certain cyber liability policies extend coverage to vendors in select situations.
An insurance agent who knows cyber liability policies well can help businesses find a policy that provides the coverages they need, including coverage for venders if it’s appropriate.
What sorts of claims do cyber liability policies cover?
What claims fall within the scope of a cyber liability policy are determined by the policy’s coverages, terms, conditions and exclusions, and not all policies cover the same claims. Depending on a policy’s terms, it might cover claims related to:
Employee theft of files or other digital data
Online attack resulting in a network security breach
Human error resulting in accidental data breach
If a business has a covered claim, a policy may cover credit monitoring costs, file restoration costs, revenue losses and certain other expenses. Again, exact coverages are dependent upon a policy’s terms and can differ.
How can businesses in Massachusetts get cyber insurance?
This material is for informational purposes only. All statements herein are subject to the provisions, exclusions and conditions of the applicable policy, state and federal laws. For an actual description of coverage, terms and conditions, please refer to the applicable insurance policy or check with your insurance professional. The illustrations, instructions and principles contained in the material are general in scope and, to the best of our knowledge, current at the time of publication.