Cyber Insurance offers coverage for liability that arises out of unauthorised use of, or unauthorised access to, electronic data or software within your network or business. Cyber liability policies also provide coverage for liability claims for spreading a virus or malicious code, computer theft, extortion, or any unintentional act, mistake, error, or omission made by your employees while performing their job.

Many companies believe investing in leading security software or IT outsourcing makes them impermeable to cyber-losses. While these resources help to prevent or mitigate losses, the truth is that neither can guarantee protection from a network breach. The proof is in the mega data breaches from some of the leading global corporations. These companies suffered dramatic financial losses even with top notch anti-virus software and expert in-house IT departments.

Traditional commercial general liability policies do not cover these new risks. Even policies with coverage extensions usually are not comprehensive enough to fully address cyber risk. Unfortunately, a resounding number of businesses are unaware of how little protection they have against a rising number of network and data threats.

Most policies today can be built around the needs of the business. An online retailer will have different needs than a “brick and mortar” small business with a limited web presence. Obviously, the size of the business, the number of customers, the type of data and other factors will affect the cost of the premium. As always, you will want to review policies from several insurers.

A good starting point is to determine what costs or expenses you would like to have covered and what types of incidents you want cover for. Circulate and discuss this list with all the relevant people, not forgetting to get all the information you need from third-party suppliers and partners. List both your own costs (known as first-party costs) and the costs that others may attempt to claim from you as a result of the incident (known as third-party costs).

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