Cyber Liability Insurance: Does Your Business Need It?
When you first start your insurance business, you probably think about expansion. How can you grow your business? How can you hire the best employees? However, safety is also key to the longevity of your business. Today, safety isn't only about the physical safety of your building and your employees, it's also about the need for cybersecurity. Does your insurance agency need cyber liability insurance?
Concerns About Cybersecurity
What is cybersecurity and why is it a concern? Cisco states that cyberattacks are "usually aimed at accessing, changing, or destroying sensitive information; extorting money from users; or interrupting normal business processes." While cyberattacks may not cause damage to your physical infrastructure, they can cause damage to your business infrastructure. What's worse, they can compromise data, which can really hurt your employees and clients, and can damage your business reputation.
While you spend most of your day working on your insurance business, hackers that engage in cyberattacks spend their days working to create more and more advanced techniques for hacking businesses like yours. It's an ongoing job to adapt your business security and processes to avoid cyberattacks.
Cyber liability insurance protects your office even when employees are working remotely.
What is Cyber Liability Insurance?
In addition to creating processes to secure the digital side of your business, it's beneficial to have cyber liability insurance. What is this insurance, and how does it work?
According to The Balance, if data "is lost or compromised by a hacker, the owners might sue your company for damages. Your firm could also incur substantial notification expenses." That's right: just notifying all of your clients could take days of your time, since there are bound to be many questions from clients about the current and future state of their data.
That's why having E&O insurance for insurance agents with cyber liability coverage is so important. Most cyber liability insurance has two general categories of coverage:
First-party coverage pays the expenses that your insurance agency incurs as a result of the data breach. This includes expenses such as notification to your clients.
Third-party coverage allows you to protect your insurance agency and compensate your clients. If a client or vendor sues your company because their personal information is now exposed online, you need to be ready. If you suffer a large-scale data breach, multiple clients may sue your agency.
Securing Cyber Liability Insurance
When you're looking for cyber liability insurance, look for extensions to your existing E&O insurance policies. Organizations such as the American Agents Alliance are able to offer cyber liability insurance extensions on our discounted E&O insurance for insurance agencies. This is available at no additional cost so that you can protect your insurance agency and do so at an affordable rate. We also offer a discount for agencies with 50% or more staff who maintain CIC designations, and this can make your E&O insurance more affordable than you might expect.
At the American Agents Alliance, we provide discounted errors and omissions insurance for insurance agents. As you create processes to protect your agency from cyberattacks, we're here to provide backup in case the worst does happen. Talk with us about our cyber liability extension today.