Most cyber policies include more than one
type of liability coverage. These coverages apply to damages or settlements that
result from covered claims. They also cover the cost of defending you against such
claims. Note that defense costs may reduce the available limit of insurance.
The next type of liability we will discuss in Part 4 of our miniseries will be Third Party liability. This is the coverage that indemnifies or protects your business when the data breach or attack against your business also affected third parties who are now looking to you to cover their damages.
What is Cyber Liability (Third Party) Insurance Coverage?
These coverages apply to damages or settlements that result from covered claims. They also cover the cost of defending you against such claims. It’s important to note again that defense costs may reduce the available limit of insurance. Virtually all cyber liability policies are covered on a ‘claims-made’ basis. Some third-party coverages may also be subject to retention.
- Network Security Liability
- Network security liability insurance covers lawsuits against you due to a data breach or to the inability of others to access data on your computer system. Coverage may apply if the data breach or inability to access your system is due to a denial of service attack, a virus, malware or unauthorized access and use of your system by a hacker or rogue employee. Policies may cover lawsuits alleging that you failed to adequately protect data belonging to clients, employees or other parties.
- Network Privacy Liability
- Network privacy liability insurance covers lawsuits based on allegations that you failed to properly protect sensitive data stored on your computer system. Some policies cover liability arising from the release of private data (such as social security numbers) belonging to your employees.
- Electronic Media Liability
- Electronic media liability insurance covers lawsuits against you for acts like libel, slander, defamation, copyright infringement, invasion of privacy or domain name infringement.
In our next series Part 5 – Examples of Third Party Cyber Liability Losses we will discuss several scenarios that might lead to a loss for your business that could be prevented by purchasing cyber insurance.
We provide Cyber Liability Insurance for all types of firms in Newton, Needham, Wellesley, and all of Massachusetts. Contact Kovalev Insurance for cyber liability insurance and request a complimentary consultation to ensure your business is properly protected.