Cyber liability insurance is an essential loss control measure for any organization that relies on technology or manages sensitive data. These policies can provide critical financial assistance following data breaches or other cyber incidents which might otherwise result in significant out-of-pocket financial losses.
Fortunately, adequate cyber liability insurance can insulate policyholders from financial losses and limit out-of-pocket costs. In the wake of a cyber incident, cyber liability insurance can generally help pay for the following:
Response costs—This may include investigating the incident or notifying affected parties.
Monitoring services—If the sensitive data of clients or other third parties was exposed, this coverage can help pay for credit and fraud monitoring services.
Incident management—Policies may help pay for IT contractors, crisis management teams or public relations firms.
Lost income—This coverage can help a policyholder recoup lost or reduced income if their operations were delayed or disrupted by a cyber incident.
Cyber extortion—If a cybercriminal holds an organization’s systems hostage or threatens to release sensitive data, cyber liability insurance may help pay them off.
Fines and legal costs—This may include noncompliance fines issued by regulatory bodies or expenses arising from lawsuits, such as representation, settlements and judgments.