In the last few years, cyber claims have become one of the top liability claims filed against companies. General liability insurance will cover bodily injury and damage to property that resulted from the operations, products, or services offered by your business. Cyber insurance is a separate type of coverage that typically covers liability for a data breach of some kind involving sensitive or personal customer information, including Social Security numbers, credit card information, account numbers, and health records.
Examples of Cyber Claims
To better understand a cyber claim, let’s look at a few cyber claim examples listed below.
- An employee at a tech company was able to breach the network security system, allowing the employee to gain access to the trade secret of a prominent customer. When the employee sold the information to a competitor, the customer sued the tech company, even though the executives weren’t aware of the situation.
- Private customers’ files were left unprotected. Even though there was no proof of malfeasance with the information, the company alerted customers to the potential breach. Several customers sued the business.
- Social Security numbers and bank account data were hacked on a business server. The private information was then sold to an entity to create false identities. A number of lawsuits ensued.
Cyber insurance can protect your business from a typical data breach by covering the legal fees and other expenses resulting from litigation.