Cyber Liability: Not Just For the 'Big Boys'

Cyber Liability coverage goes by many different names in the marketplace, and each carrier does things a little bit differently. The premise for Cyber Liability is that your General Liability policy would not cover these types of claims. This article will discuss the scope of the Cyber Liability policy.

Cyber liability coverage is no longer only a necessity for multi-million dollar operations and tech companies. Even little ‘mom and pop shops’ have significant exposure to a Cyber Liability claim.

So what all is included in the scope of Cyber Liability? The following is a list of possible scenarios that would be covered by a typical Cyber Liability (CL) policy:

  • If a hacker was able to steal the social security numbers or other personal information about your employees or customers, the CL policy would cover the expenses for notifying the government and victims of the breach, credit monitoring for the victims, costs to recover stolen identities, costs of any fines or penalties, and the extra costs for public relations.
  • If a hacker was able to destroy company information/trade secrets/digital assets/etc., the CL policy would pay to recreate those items.
  • The CL policy would pay any damages to third parties caused by a breach of security
  • If a hacker was able to deny your online service to customers/vendors, the CL policy would pay the loss of business income, and the damages to your vendors if they weren’t able to fulfill orders.
  • If a hacker was threatening to destroy/deny service if a ransom isn’t paid, the CL policy would pay the ransom.
  • If a fraudulent funds transfer was made, the CL policy would cover the money lost.
  • The CL policy would cover any suits brought against you for online infringement of domain name, copyrights, trade names, slogans, service marks, etc.
  • The CL policy would cover any business interruption losses due to any of these situations, and it would also cover the costs to re-secure your website/server/etc. after a breach.

Simply having private information stored on your computer creates a Cyber Liability exposure. When you have a website, social media site, or online commerce abilities, your risk increases even more! Remember, it's always better to have too much coverage than not enough, when it comes to insurance.


Colten Zamrzla, CPCU

Colten first started in the insurance industry in 2010. He then pursued a Bachelor's degree in Finance & Insurance from the University of Nebraska at Lincoln. Once graduated, he immediately started studying for the CPCU and achieved it in just shy of a year. He is solely focused on commercial insurance, able to assist all types of businesses and nonprofits in risk management.

Colten has dedication and passion for his clients and the insurance industry as a whole. He dedicates time to furthering his knowledge on all things business and insurance, and he volunteers for the Independent Insurance Agents of Nebraska, a state-based trade association.