The Financial Benefits of Cyber Liability Insurance for Businesses

Modern technology has unlocked many new conveniences, innovations and opportunities for businesses across various sectors. However, while newly available applications, programs, software and other digital solutions may be attractive additions to the modern workplace, introducing them also requires company leaders to consider loss control needs. With this in mind, responsible organizations should conduct their due diligence regarding cyber liability insurance and understand how this crucial type of coverage may provide necessary financial benefits.

What Is Cyber Liability Insurance? 

Cyber liability insurance, also known as cyber insurance, is an increasingly essential type of coverage for businesses, regardless of industry or size. These policies focus on financially protecting companies from the fiscal ramifications of cyber incidents, such as data breaches, phishing attacks and malware infections. Once purchased, cyber liability insurance acts as a contract between an organization and its insurance company. In response to covered cyber incidents, policyholders retain the right to file a claim for financial assistance, which may offset losses and otherwise devastating expenses.

What Are the Financial Benefits of Cyber Liability Insurance?

Like many insurance products, cyber liability insurance can provide critical funds and resources to limit a policyholder’s out-of-pocket financial losses. Cyber liability insurance coverage can often be tailored and sculpted to suit a business’s needs, preferences and unique circumstances, but generally, these policies may include the following benefits:

• They may pay for incident response costs. This may include providing funds to help hire digital forensics investigators who can uncover the cause of a cyber incident. Furthermore, cyber liability insurance may help cover costs related to notifying affected parties, such as clients or partners whose sensitive data may have been compromised.
• They may restore operations and data. A cyber liability insurance policy may also help a company get back on its feet following a cyber incident, including paying for costs associated with recovering compromised data and recouping lost revenue due to delays.
• They may limit lasting repercussions. In the aftermath of a cyber incident, a business may face various consequences, including fines, reputational harm and lawsuits. In response, cyber liability coverage may help policyholders cover fines, settlements and judgments, as well as enlist the assistance of public relations firms and attorneys.

Who Can Benefit From Cyber Liability Insurance?

In the digital era, businesses of all sizes and sectors should strongly consider purchasing cyber liability insurance. Even small- and medium-sized companies have become attractive targets for cybercriminals, and these organizations may also lack the financial resources of larger counterparts, meaning that incidents could have particularly damaging effects.

We’re Here to Help

At Builtwell Insurance Agency Inc., we have over a century of experience to draw upon while assessing and addressing businesses’ coverage needs. Visit our website or call 423-668-4888 to learn more about cyber liability insurance and its financial benefits.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.