In our technological world, it’s not a matter of if a hacker strikes your business but how you respond when it happens. If your business stores any kind of customer information, you may be liable for damages. Without cyber liability insurance, your company could be in financial jeopardy.
Cyber liability insurance can cover two types of financial compensations you may need if a hacker leaks your business’ information: first-party coverage and third-party defense. Here’s what that means:
If a hacker comes after your information, you may need to take immediate steps to make it right for your customers. You may need to provide compensation to those affected, hire a public relations firm to handle your reputation, and incur more expenses. This type of coverage ensures that you, the first party, do not pay all of these costs out of pocket.
Third-Party Defense and Coverage
Unfortunately, the people whose information leaked may decide to file suit against your business if you are the victim of a data breach. Whether only one customer files or you need to defend your company against a class-action lawsuit, the expenses add up quickly. Even if you’re not at fault, just hiring lawyers can leave your business in financial trouble. Cyber liability insurance can help you cover the attorney fees and anything you owe the claimants.