Liability insurance vs. Cyber insurance
Cyber insurance and cyber liability insurance are terms often used interchangeably, but they can refer to different types of coverage depending on the context.
Cyber insurance is a broad term that generally refers to a range of coverages designed to protect businesses from various technology-related risks. It can include both first-party and third-party coverages. First-party coverage insures against financial losses the insured organization incurs directly due to a cyber incident, such as business interruption losses, data recovery costs, and ransom payments. Third-party coverage refers to liability coverage for claims made against the insured organization due to a cyber incident, such as lawsuits related to data breaches.
On the other hand, cyber liability insurance is often used to specifically refer to the third-party liability coverage part of a cyber insurance policy. It covers the insured organization's liability for damages resulting from a data breach or loss of sensitive information. This can include costs related to legal defense, settlements, and judgments, as well as regulatory fines and penalties.
Both types of policies aim to mitigate the financial impact of cyber events, but the specific coverages can vary widely between insurers and individual policies.
Cyber Liability Insurance Policies
Cyber liability insurance policies typically include coverage for third-party claims resulting from cyber incidents:
📌 Privacy Liability Coverage: Protects against liabilities arising from data breaches that expose private data and violations of privacy law.
📌 Network Security: Covers losses due to security breaches, such as unauthorized access, malware, and DDoS attacks.
📌 Network Business Interruption: Provides coverage for loss of income and extra expenses incurred due to a cyber event that disrupts the business.
📌 Media Liability: Covers legal claims due to electronic content, such as copyright infringement, defamation, or invasion of privacy.
📌 Errors and Omissions (E&O): Protects against losses from mistakes in the provided services, particularly for technology and professional services firms.
Cyber insurance policies generally include both first-party and third-party coverages. Typical inclusions are:
📌 Data Destruction: Covers costs related to the loss or corruption of data.
📌 Extortion: Provides protection against threats to release sensitive information or attack systems unless a ransom is paid.
📌 Online Theft: Protects against losses due to unauthorized online transactions.
📌 Hacking Activities: Covers damages from hacking, including data breaches and system intrusions.
📌 Denial of Service: Includes coverage for losses due to deliberate or accidental denial of service attacks.
📌 Criminal Reward Funds: Some policies may offer funds for information leading to the arrest and conviction of cybercriminals.