Cyber liability insurance or data breach insurance: what is the difference?
As cyber insurance cover becomes increasingly popular and UK data regulations and laws are applying pressure for better protection, what does this mean for your business?
Cyber can very often be overlooked when purchasing your insurance cover as many businesses aren’t aware of the cybersecurity threats and potential attacks that they are vulnerable to. Approximately 462,000 businesses experienced a cyber security breach or attack in the last 12 months and 79% of those were targeted through phishing attacks. To know what type of protection your business needs, you first need to know what risks you are susceptible to.
Common types of cybersecurity threats:
- Phishing – Phishing is a form of social engineering where attackers deceive people into revealing sensitive information or installing malware such as ransomware.
- Ransomware – Ransomware is a type of malware from crypto virology that threatens to publish the victim’s personal data or permanently block access to it unless a ransom is paid off.
- Denial-of-Service (DoS) Attacks – A malicious, targeted attack that floods a network with false requests in order to disrupt business operations.
To read more about cybersecurity threats click here:
What can be said is that all businesses are at risk to ALL types of attacks and breaches, but the type of data or the volume that you store in your business will likely impact your choice in insurance cover.
What is Cyber Liability insurance?
Cyber Liability insurance is a comprehensive policy for both first-party and third-party coverage.
First-party coverage insures against financial losses the business may incur in responding to the incident, including investigation of the incident, fixing affected systems and informing customers of a breach. Third-party coverage insures the business against customer claims, stemming from an attack or data breach.
In simple terms, if a company experiences a cyberattack in which sensitive customer information has been stolen or leaked, the customer can file a lawsuit against the company for failing to safeguard their information. In this case, Cyber Liability cover would provide coverage for defence of such third-party claims and lawsuits, including potential damages, judgments, and/or settlements.
If your business retains sensitive customer information, we highly recommend this type of cover.
What is Data Breach insurance?
Data breach insurance is often seen as a subset of Cyber Liability insurance and only provides the business with first-party coverage. It does not cover any third-party claims such as lawsuits against the company. First-party losses may include:
- Business interruption losses
- Legal fees
- Cost to hire a cybersecurity firm
- PR costs
- Cost of notifying affected individuals
This type of cover is appropriate for businesses who only want to cover their own personal losses.
A key point to highlight here is that when looking at both cyber liability and data breach insurance, they should not be viewed as substitutes to one another. Instead, they should be seen as complementary and can work together to create a strong cybersecurity policy.
You can of course have one without the other, however, businesses should really take the time to evaluate what data they store, maintain and collect as well as the potential ramifications of a breach, and translate it into the amount of cover they require for their level of risk.
We’re here to help
At Barnes Commercial we’re here to help you arrange insurance to protect your business against any type of cyber threat.
We work closely with our clients to gain an in-depth understanding of their business, so we can assess the potential risks being faced. This means that our recommended insurance programme will be unique to your business, so if you should fall prey to a cyber related incident, you can be confident that your business will be protected and recover quickly.
Arrange an appointment to talk to us today about how we can help you to develop a Cyber Liability or Data Breach Insurance package for your business needs. You can call us on 01480 272727 or send an email to firstname.lastname@example.org
Contact us today
"*" indicates required fields