Cyber Liability Insurance: Protect Your Business Online

Love it or Hate it, the Internet is here to stay (and you probably don’t question that fact since you’re reading this article online).  With each moment, the Internet becomes deeper ingrained in both our personal and professional lives.

Though technology and the Internet has helped to make our lives more productive, increased communication and access to information, it has at the same time created new dangers and pitfalls we must be cognizant of.

Cyber Liability Insurance

Small Business Now the Focus of Cyber Attacks

Twenty-first century businesses are under constant threat of cyber attack from individuals and organizations looking to steal and profit off the information stored on their computers.

Though all business industries are susceptible to a cyber liability loss, for the purposes of this article, we will focus on the risk concerns for professional trades such as lawyers, accountants, real estate agents, dentists, doctors, etc.

The professional trades listed above, (not an inclusive list, there are many others), are extremely vulnerable to a data security or privacy lawsuit because of the confidential and personal information stored in their computer databases.

Professional service businesses are also seen as easy targets.

American Express understands that hackers want the valuable personal and financial data stored on their computer mainframes… so American Express protects itself with both preventative systems and insurance coverage.

The average main-street law firm or accounting agency sees themselves as too small to be targeted.


These smaller organizations are seen as “easy pickins.” Hackers have turned their malicious gaze upon the small business.  According to Symantec, in first quarter of 2012, 36 percent of all targeted attacks (58 per day) during the last six months were directed at businesses with 250 or fewer employees. That figure was 18 percent at the  end of Dec. 2011.

That is DOUBLE the attacks in one quarter… Scary.

Cyber Liability Insurance

Today’s cyber liability insurance policy (there have been many iterations over the 10 year life of cyber liability), includes network liability as well as the following first party coverages:

  • Privacy Liability
  • Regulatory Liability
  • Expenses surrounding a security breach event

In an article by the Insurance Journal on cyber liability outlines further where exposures come from: including outsourced service providers for Web hosting, credit card processing, call centers, document storage, and data warehousing.

Covered Events Include:

  • Unauthorized access or use of a computer system
  • Theft or destruction of data
  • Hacker attacks against third parties
  • Denial of service attacks
  • Malicious code
  • Privacy liability arising from a network security breach
  • Security breaches of personal information in any format, including non-electronic
  • Violations of state and federal privacy regulations (HIPAA)
  • Security breach notification laws
If you feel your business is exposed to this type of loss (which it most likely is) I must caution you, cyber liability in insurance terms is very young.  Each insurance carrier’s policy forms will not be the same.  There will be huge different coverage and exclusions from carrier to carrier.

Talk with your insurance professional in depth to make sure you understand what you are purchasing.  This is NOT a homeowners policy, this is an advanced business policy that demands discussion.

Hacker Photo via Shutterstock

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Ryan Hanley Ryan Hanley is Founder of Hanley Media Lab, an advanced digital marketing agency helping companies grow their audience to grow their business. He also produces one of the fastest growing content marketing podcasts on iTunes, Content Warfare TV.

5 Reactions
  1. I’ve seen several hosted server accounts hacked via out-of-date WordPress versions, themes and plugins. Keeping current is vital but this is an option I hadn’t come across.

  2. Oh wow, now this is awesome! I haven’t yet seen this either and I think it’s a great idea. My blog site is my everything and I would be devastated were it to get hacked. This seems like a great option to protect my site and my investment. Thanks for sharing!