Cyber Liability and the Work from Home World

You’ve taken the necessary step to set up your workers to access client files and proprietary work data from home. There is no better time to understand your current Cyber Liability insurance coverage, and what it does and does NOT do:

Cyber Liability is an industry term that can refer to one or a number of distinct and separate insurance coverages. As an emerging area of business risk, insurance carriers have adopted a number of individually rendered policy forms and coverage plans. While there are hopeful signs of standardization, as of today, coverage varies widely from carrier to carrier.

To complicate matters further, it may not be clear where all of your risk is coming from. Are my client files my biggest area of risk? Is my customer information my most valuable asset? Can my server be hacked?

What’s more, there is a significant difference between the limits and quality of coverage offered by endorsement to existing policies versus standalone coverage. Generally, cyber liability can deal with five major areas:

1. Your liability to others if their data or info is stolen or used and there are damages.
2. Regulatory fines and fees that may be associated with your responsibility in letting this data escape.
3. Breach response, Public relations costs, and credit monitoring
4. Protection and restoration of your network, computers and systems. This means paying a firm to get them up and running.
5. Paying for cyber extortion.

In many cases, the policy form can have one total or “aggregate” limit, with separate sub-limits related to the coverage areas above for a single claim. Also, certain classes of business will see higher premiums or limitations on coverage depending upon their operations.

If you are depending upon cyber coverage from an endorsement to your business owners policy, now maybe a perfect time to consider standalone coverage. We find ourselves at a moment where your employees are all working from home and there are various degrees of virus software protecting your client files. The standalone product typically provides higher limits, it has dedicated underwriting and claims support.

But regardless of what product you choose, don’t wait to take the opportunity to learn about the coverage you currently carry. Consult an independent insurance agent to help you navigate through this complex environment.