Ask Fitz: Cyber Liability & Cybersecurity Threats

John FitzGibbons 

Many small business owners think that cyber risks belong only to the big companies such as retail giants and large tech companies. In reality though, a large percentage of cyber-attacks target small businesses. In fact, according to 2019 Verizon Data Breach Investigation Report, 43% of all cyberattacks targeted small businesses (source). Cyber liability and cyber security risks can be difficult to understand so below we have identified a list of coverages included in most cyber liability policies.

First Party Coverages (Protects YOU)

  • Loss or Damage to Electronic Data – this includes losses caused by damage, theft, disruption or corruption of electronic data. This coverage includes costs to restore or recover lost data. This also covers the cost of third parties needed to save, extract or reconstruct your data. The lost data must result from a covered cyber liability event, such a hacker, a virus or a denial of service attack.
  • Loss of Income or Extra Expenses – this coverage portion replaces lost income and expenses due to a full or partial shutdown of your IT systems due to a covered cyber liability event. A commercial property policy does not provide coverage for this type of business interruption coverage.
  • Cyber Extortion Losses – this coverage responds when the covered party receives a threat in which a third party threatens either to attack the insured's computer system or to release confidential information in the insured's possession unless the insured pays the extortionist some amount of money.
  • Notification Costs – this coverage includes cost of notifying parties affected by the data breach, attorney fees related to determining notification requirements and in some cases, this may include the cost of providing credit monitoring for affected parties.
  • Damage to Your Reputation – this includes public relations costs required to protect your company’s reputation following a data breach. 

Third Party Liability Coverages (Protects OTHERS)

  • Network Security Liability – Covers lawsuits against your business due to a data breach or to the inability to access data on your IT system.
  • Network Privacy Liability – Covers lawsuits alleging your business did not adequately protect sensitive data (customer, client or third parties) stored on your IT systems.
  • Electronic Media Liability – Covers lawsuits against your business that relate to libel, slander, defamation, copyright infringement, invasion of privacy or domain name infringement as a result of online publication of electronic data.

Claims NOT Covered by Cyber

  • Bodily injury or property: Covered under a general liability policy.
  • Loss of Property: Covered under a commercial property policy.
  • Criminal Activity: A cyber liability policy does not cover employee theft, dishonesty or fraud, but rather a commercial crime policy responds to these events.

Understanding a business’s cyber liability risk is a challenge; however, with the growing dependence on technology, most all businesses need to consider a cyber liability policy.  As a Trusted Choice Independent Agency, the Oswego-based FitzGibbons Agency is here to help you review your cyber risks and determine if your business may benefit from a cyber liability policy. We know the best coverage options in the industry and can help tailor a cyber liability policy to meet your business’ specific needs.

Just Ask Fitz!

John FitzGibbons

FitzGibbons Agency

44 East Bridge Street

Oswego, New York 13126

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