Your business probably stores the personal and financial information of its customers. The problem is, if this sensitive data — name, address, credit card information — is lost or compromised, restoring it can cost thousands of dollars or more. Further, you could be on the hook for damages to your clients, whose data was compromised. Another component regards state laws. You may have a legal obligation to notify those impacted by a data breach and that can be expensive.
To protect your company against these costs, consider cyber liability coverage.
Marcel Manning, CEO at Leesburg FL computer services company, NexgenTec offers up some sound cyber liability advice.
What’s Cyber Liability Coverage?
Cyber liability insurance pays for financial losses like those mentioned above that are caused by cybersecurity events. These policies may include first-party and third-party insurance. First-party coverage is a loss sustained directly by your small or medium business. Third-party damages include losses by another individual or entity.
What is First-Party Coverage?
Cyber liability insurance covers crime and property damage. This includes notification expenses, but there’s typically a deductible. Here are the main coverage types:
- Loss or Damage Involving Electronic Data: Covers the cost of data restoration.
- Loss of Income and Additional Expenses: This coverage reimburses you for lost revenue and extra expenses after a computer system failure caused by a covered peril.
- Cyber Extortion Losses: This mainly covers you when a hacker breaks into your system and holds it hostage.
- Notification Costs: Pays to notify everyone impacted by a data breach, as required by statutes or regulations.
- Reputation Damage: Some companies suffer a hit to their reputation after a data breach. This coverage pays for public relations to mitigate the damage.
What Are Third-Party Liability Coverages?
There are also policies available that pay for settlements resulting from a breach. This may include payment for legal expenses to defend your company. Most cyber liability policies are in the claims-made category, which accounts for an extended length of time between a covered event and a filed claim.
- Network Security Liability: This insurance pays out lawsuits filed against you after a breach. It may be filed by third parties dependent on your unavailable system.
- Network Privacy Liability: This covers lawsuits claiming that you failed to protect data in your network.
- Electronic Media Liability: This pays for lawsuits for acts like slander, defamation, libel, invasion of privacy or copyright infringement.
- Errors and Omissions Liability: The policy protects you against errors or omissions made during professional services.
Nexgentech understands that prevention is the best way to avoid insurance claims and downtime. That’s why we offer data security and business continuity services to our SMB clients. Contact NexgenTec in Leesburg, FL today at (352) 234-8589 for more information on how we can improve your IT infrastructure and become your tech company.
Stuart Crawford serves as Managing Partner with Ulistic LP, a specialty MSP Marketing firm focused on information technology marketing and business development. He brings a wealth of knowledge and experience pertaining to how technology business owners and IT firms can use marketing as a vehicle to obtain success.
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