Cyber Security Insurance is designed to cover your business' liability in the event of a data breach involving sensitive customer information, such as social security numbers, credit card numbers, account numbers, driver's license numbers and health records. This could happen in an event as simple as having a laptop stolen.
Texas's Identity Theft Enforcement and Protection Act requires any entity conducting business in the Lone Star state to inform its customers when their data is compromised in a data breach. Businesses can be fined up to $250,000 for data breaches. For more substantial data breaches (those involving more than 10,000 consumers), a business has to inform consumer reporting agencies as well.
Keep this in mind when considering Cyber Security Insurance
Your General Liability Policy covers bodily injuries and property damage resulting from your products, services or operations. Cyber security insurance is often excluded from a general liability policy.
Cyber insurance covers a variety of risks that are divided into two parts:
First-party coverage: Covers damages you and your business suffer because of a data breach. This can include Computer Attacks, Cyber Extortion, Business Interruption, Data Recovery, Identity Recovery, and more.
Third-party coverage: Covers damages if your customers or partners are affected by a cyber-attack on your business. This can include Legal Fees, Settlement Costs, Network Security Failure, Media Liabilities, and more.
As more small businesses choose to use and store digital data, the need for this coverage has expanded to more than just the healthcare and banking industries. A few of the many businesses that should consider a cyber policy include:
- Engineering Firms
- Manufacturing Companies
- Marketing Companies
- Technology Companies
- Financial Firms
- Legal Firms