5 Cyber Liabilities Your Traditional Policy Won't Cover
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Technology is a large part of any manufacturing company. Cyber liability insurance has become an important component of an organization’s risk management strategy. Exposure to cyber losses is increasing in many areas and will likely continue to expand.
It’s important to consider that traditional business liability policies typically don’t protect against most cyber exposures. Standard commercial policies are written to insure against injury or physical loss and will do little, if anything, to shield you from electronic damages and the associated costs they may incur. Exposures to cyber loss are vast, ranging from the content you put on your website to stored customer data. Awareness of the potential cyber liabilities your company faces is essential to managing risk through proper coverage.
- Data Breaches
Companies are responsible to protect personal information of their employees as well as clients. Notification of a breach to those parties is now legally required in most states and is expensive. Exposures to a data breach can happen through hacking, loss of a laptop, unauthorized employee access among other means.
- Third Party Damages
These damages can have various forms. Transmitting a virus to another company or a data breach for companies responsible for protecting or maintaining data can result in Third Party damages.
- Business Interruption
Many businesses maintain this coverage for losses resulting from fire, natural disaster, etc. Most policies won’t provide coverage for loss of use of your computer system due to data breach, virus or other cyber issues that can shut the business down.
- Cyber Extortion
This is an area of increasing risk where hackers can control websites or networks and demand payment to restore your systems to working order. This may impact the ability to conduct business and can result in significant direct and indirect financial loss.
- Intellectual Property
An organization with online presences can inadvertently violate copyright or trademark protection resulting in legal costs and damages. Social media can also create exposure for an organization resulting in liability.
Coverage programs vary by insurance carrier. Understanding how your manufacturing business can be impacted by cyber loss is a critical component of matching the correct coverage program to your greatest risk.
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