• Your vehicle is broken into and your laptop is stolen. This laptop had the ability to access your auction software which has the confidential information of your clients on it.
  • An employee inadvertently downloaded a destructive computer virus onto the company’s network resulting not only in data loss for your company, but it was also transmitted to a client’s network system and they sustained complete data loss as well.
  • Someone posing as your payroll provider requested that you set up a new account due to them upgrading their system. They then had access to all of your employee’s data and were able to open credit cards in the names of your employees.
  • You send a PDF attachment to a client wire transfer instructions. The next day, the money is not in your account and when you contact the client, they let you know that they wire transferred the funds an hour after you emailed them. The PDF that you sent was intercepted, the wire transfer instructions changed, and the money is now in a foreign bank account.

There is more to cyber liability than just a “breach”. Many small businesses believe that if they don’t have a website, or they are using someone else’s platform, then they don’t have a cyber liability exposure. In three of the four above examples the damage was caused through email and not from a website or online platform.

If you use the internet, you have an exposure.

Cyber liability claims are claims made against a business for damages caused by a data breach or other cyber incident. These claims can be filed by customers, employees, or other third parties.

The average payout for cyber liability claims for a small to medium sized business is $345,000 while the average cost for a ransomware attack for a small to medium sized business is $485,000.  Without cyber liability insurance, a small to medium sized business is paying that out of their operating fund.

Cyber liability insurance is an important step to protect a business from the financial losses that can result from a data breach or other cyber incident. It can help to cover the cost of defending against lawsuits, paying damages, and complying with regulatory requirements.

Many small businesses do not believe that they will be a target for a cyber attack, but it’s important to remember that cyber criminals practice their skills on smaller business because those businesses traditionally don’t invest as much in their cyber security as larger businesses do. Cyber criminals start small and as they develop their skills, they move on to large businesses.

Each claim is evaluated on its own merit at the time of the claim. The above scenarios are broad examples to help with understanding a potential exposure and the appropriate coverage to protect your business. Please read your policy for full coverage details.