Cyber Liability Insurance2019-06-04T16:21:02-04:00

Cyber Liability Insurance

When business systems are breached or hacked you can incur costly containment and repair expenses, furthermore, you also run the risk of lawsuits brought on by 3rd parties.

Cyber Liability Insurance protects businesses against these risks.

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Cyber Liability Insurance

What is Cyber Liability Insurance?

If hackers or cybercriminals infiltrate your business network, take over your website, hold data hostage, or steal sensitive client information, you can be held liable for the incident besides having to take care of the recovery costs.  Cyber Liability Insurance, also known as Cyber-security Insurance, helps businesses recover from, and manage costs associated with such an event.

In a recent article by PCMag, the average cost for data breach for Canadian businesses was an astounding $4.74 million, hence the importance of a robust Cyber Liability Insurance.

What Does Cyber Liability Insurance Cover?

There are two major types of cyber liability or cybersecurity insurance coverage:

  • First-party insurance provides coverage for direct costs associated with responding to the failure and managing the incident.
  • Third-party insurance provides coverage for lawsuits or claims that come as a result of a cyber incident.

Cyber Liability Insurance can cover the following:

  • Breach Assessment & Repair
  • Reputation Management and hiring a PR or crisis management firm
  • 3rd party legal fees & settlements
  • Regulatory fines your company could be ordered to pay

What is Not Covered?

It is quite important to understand whether you need to add on extra cyber liability insurance coverage.

Below are some add-ons you might want to consider:

1. Acts and/or omissions of third parties: Coverage in the event that a claim arises because of the actions of one of your vendors.

2. Data Restoration Costs: If you manage large amounts of sensitive data, consider adding this coverage.

3. Failure to protect data: This coverage would protect you in case a lost laptop or USB key results in the release of sensitive data.

4. Regulatory fines and penalties: A significant breach could result in regulatory investigations, fines or penalties.

5. Business interruption coverage: Can cover the loss of revenue as a result a data breach.

Talk to us about which cybersecurity insurance coverages are right for your business.

Who needs Cyber Liability Insurance?

Canadian business owners may think they don’t need Cyber Liability coverage unless they are in the tech industry. The reality is that any business is at risk of a cyber attack. If your business handles any of the following, you should consider a cyber liability insurance:

  • Customer payment, credit, or bank account information
  • Medical information
  • Social Insurance Numbers (SIN) or driver’s license numbers
  • Customer names, email addresses, phone numbers, and addresses

Retailers, healthcare organizations, and financial service providers are especially at risk because they handle large amounts of sensitive and lucrative client information and because they often lack the technical sophistication to have robust security measures.

Learn more about how to protect your business against cyber attacks.

What is the Cost of Cyber Liability Insurance?

The cost of a Cyber Liability policy varies according to factors such as:

  • Industry
  • Level of experience in the industry
  • Past cyber attacks
  • Company size
  • Amount of client information being stored
  • Security systems in place
  • Employee training on cyber security

Cyber insurance starts at $200/year for most companies, but companies holding financial data or healthcare information can expect to spend $1000/year or more.

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Common scenarios where Cyber Liability is useful:

Commercial Insurance Canada Scenario

A virus enters your IT system and damages your electronic data, causing your business to screech to a halt. A cyber liability policy will cover the costs of business interruption.

Commercial Insurance for Contractors

A hacker steals your electronic data and threatens to sell the information unless you pay him to recover the files.

Commercial Insurance for Restaurants

A data breach has left your company with a bad reputation with clients and vendors. A cyber liability policy will cover marketing costs to recover your reputation.

Frequently Asked Questions about
Cyber Liability Insurance

What are the most common types of cyber attacks covered by cyber liability insurance?2019-06-04T15:15:53-04:00

Malware: malicious software that usually make their way through with link clicks and attachment downloads.
Phishing: fraudulent emails to steal information or encourage malware downloads.
DDoS (Distributed Denial of Service): bombarding a business’s server with multiple simultaneous requests to stop it from fulfilling legitimate requests.

Does my E&O policy already cover cybersecurity?2019-06-04T15:16:29-04:00

No, it is a common misconception that Technology Errors and Omissions (Tech E&O) coverage provides protection against cybercrimes. Tech E&O covers losses resulting from technology services and technology products but it will not protect you in case of loss of private third party information.    

Does cyber insurance cover cyber extortion (ransomware)?2019-06-03T12:55:23-04:00

Cyber extortion coverage is not included by default in all our cyber liability insurance packages. If you require cyber extortion coverage, discuss it with your assigned broker. It provides coverage for extortion related expenses such as hiring a consultant or negotiator and repair costs if the recovered data is locked or damaged.

Do hackers even target small businesses (do small businesses need cyber liability insurance)?2019-06-04T15:20:04-04:00

Yes. According to StatCan, one-fifth of all Canadian businesses were targeted by hackers in 2017. Hackers especially prefer small businesses because they are considered ‘low-hanging fruits’. Cyber security measures are expensive, and small businesses usually don’t have the infrastructure and trained personnel in place to prevent these attacks.

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