Have You Fully Assessed Your Cyber Liability Risk?

Cyber Liability Risk

Many of us don’t pay particular interest to the threat of cyber-attacks or cyber liability, maybe we think our business is too small or insulated to be of any interest to hackers, or that our business insurance must cover us, right?

For many of us, when we think of cyber-attacks we are more concerned with the more passive form, viruses that shut you down and ruin your systems, or that corrupt your data.

The reality is that cyber-attacks are quite real, and can be quite aggressive, and do present real cyber liability risk to your business.

If they can get to the big guys …

In 2015 we witnessed several large businesses with excellent security protocols get victimized by cyber-attacks. Good companies like Primera Blue Cross, Anthem, Sony Pictures, Target, JP Morgan Chase, Home Depot, and Staples just to name a few.

In total, the cyber-attacks against these companies placed at risk over 240 million credit records, credit card data files, and household/personal information.

Cyber criminals are sophisticated. They have the tools and resources to perpetrate large scale attacks, and can wreak havoc on your customer data.

It’s time to think about your cyber liability risk

As a business owner or risk manager it’s time to begin paying more serious consideration to your cyber liability. It’s not good enough to just invest in the best IT hardware and security software, you need to get the proper protection for when those safeguards fail.

Regardless of business size, many companies report that they suffer at least one significant cyber-attack incident annually. Business owners also share that they have been victimized by computer related vandalism (including denial of service attacks where operations are jammed).

These attacks go beyond mere frustration, more often than not, these problems tend to trigger significant financial losses.

Even when the attempts are unsuccessful, the financial and human resource costs associated with handling these and other cyber liability risks are staggering.

What type of businesses are most at risk?

Most security breaches have involved attempts by cyber criminals to acquire sensitive company information, usually concerning their customers or clients. Businesses and entities that are popular targets include:

  • Financial Institutions
  • Hospitals
  • Retailers
  • Transportation Services
  • Information Services
  • Food Services
  • Manufacturers
  • Professional Services
  • Universities

If you find yourself in doing business in one of these classes, you may be a greater target, so there is much more reason to take great care in your technology and protection.

But if you don’t find your business class above, don’t think you’re free from risk, all businesses need to take cyber-attacks and cyber liability seriously.

There is an insurance solution

In recent years the insurance market has evolved to address cyber related risks, and now we have specific cyber liability insurance coverage. This has become necessary because traditional property and liability coverage was not designed in a meaningful way to address the new technologies and cyber risks.

Cyber liability policies generally provide two types of coverage that may not be available in conventional business insurance policies. One form of coverage is designed to protect businesses against damage caused to its customers when data security is compromised. A second type of coverage is for tech companies who face lawsuits from clients who claim damages by the products they purchased from software and hardware providers. You guessed it, this type coverage is for things like flawed security software.

Typically, a cyber liability insurance it designed to cover harm due to unauthorized access, introduction of virus and generally any activities involving business use of the internet.


If you’re shopping for business insurance, or scheduled to review your coverage with your insurance agent, make sure this essential coverage is offered in your package.

The types of things you want to make sure to review with your insurance agent are the extent of your businesses need for cyber liability insurance, what is the breadth of your online activities and exposure?  This can determine the breadth of coverage you may need. Do you need professional liability? What is the right amount of the coverage, deductibles or coinsurance? A business should also determine if it should also arrange excess or catastrophic levels of coverage.

If your business operations extend beyond our domestic boarders, coverage should consider the need for international protection.

Cyber liability risk is complex and dynamic, and the costs to your business if you fall victim to a cyber-attack can be significant, make sure you’re prepared for all the potential pitfalls while you take full advantage of the opportunities the internet has to offer your business.

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