The number of electronic transactions grows every day. They have become commonplace for most businesses. But is data transmitted and stored electronically safe? As we all know, it is not completely protected. That is why insurers have introduced cyber liability insurance. It is a new type of liability cover designed to protect you financially in case of breaches in electronic data security.
How It Works
Cyber liability insurance covers liability which arises out of unauthorised access to or unauthorised use of electronic data or software which is stored, operated and used by your company. Basically, it covers data theft and the spreading of viruses. It is important to note that it covers negligence, error or omission associated with data and software use as well. For instance, if an employee of yours sends the personal information of a client to another client’s email accidentally, the policy will cover the error.
It is natural to ask yourself what the difference between cyber liability cover and a traditional liability cover is. It comes from the fact that the traditional insurance covers only tangible assets. For example, with a traditional policy, you will be covered against loss of documents due to negligence, error or omission. These are typically physical documents stored in your office. Any client data which you store in an electronic database is not covered by a traditional policy.
The Main Features
The main item covered by a cyber liability insurance policy is network privacy. It protects you in case a client or a member of the public has suffered loss or damage due to your inability to protect sensitive data stored on your network. The issue typically arises from data thefts and leaks. Network security is covered as well. The policy will kick in to cover your liability in case there is a data breach or users are unable to access the data which they are entitled to.
One of the latest additions to this type of insurance is the electronic media cover. It covers you in case of defamation, libel, slander, breach of confidentiality, invasion or privacy or copyright infringement arising out of the publication of electronic data on the web. Usually, all types of websites including the social media are covered.
Overall, the cyber liability cover is quite useful to all businesses which keep and use electronic databases and software utilising private data. The available policies are highly customisable to meet the needs of the particular company. No matter whether you have a large company, run an online store or operate a small bike shop, you will find a cover which matches your needs and budget as well.