Cyber Liability & Network Security Insurance

Cyber Liability and Network Security Insurance provide damages and defense costs for claims arising from a breach in the insured’s computer system or transmission of a virus. This can also include communications and media liability from an insured’s online branding and content.

Cyber and network privacy insurance is different than technology errors and omissions (Tech E&O). Tech E&O is intended to protect providers of technology products and services, such as computer software and hardware manufacturers for liability resulting from their professional (design) services.

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Electronic Activities

Network and Cyber policies are intended to cover a variety of liability and property losses that may result when a business engages in various electronic activities, such as sharing digital information online or collecting confidential data within its internal network. These policies can cover a firm’s liability for a data breach in which the firm’s customers’ personal information, such as bank account numbers or credit card numbers, is exposed or stolen by a hacker who has gained access to the firm’s network.

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Computer Viruses

Network and Cyber insurance also protects a firm that accidentally transmits a virus to customers. Transmission of a virus is very common these days and can cause significant damage to a firm’s computer network, private information, access to internal data and even downtime costs. These policies cover many expenses associated with data breaches, including notification costs, credit monitoring, costs to defend claims by state regulators, fines and penalties, and loss resulting from identity theft. In addition, the policies cover property exposures from business interruption, data loss, computer fraud, funds transfer loss, and cyber extortion.

EXAMPLES OF NETWORK AND CYBER LIABILITY

Stolen laptop

An employee’s company laptop containing private customer information is stolen from his car. As a result, customers sue the company for damages resulting from alleged failure to protect their private corporate information. In addition, the thief now has access to the employee’s corporate email and documents.

Cyber Extortion

An employee receives an email from what appears to be a customer’s email address. It resembles the customer’s email address but it is actually a fake email containing malware. The employee opens the attachment within the email that downloads a virus onto his computer. The virus quickly spreads throughout the entire firm’s internal network and locks-down all computers and files. The hackers demand $20,000 from the firm to unlock all of their computers so they can retrieve their files and internal communications.

Data breach

A regional retail computer system is compromised when a third party sends a virus via email to a number of employees. The virus allows the hacker to access the system and capture the names, addresses and credit card numbers for more than 100,000 customers.

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