Cyber risk is a real and growing threat today. Security breaches can result in financial loss, data loss, and damage to reputation. Insurance is now offered by many companies to counteract the damage done by these attacks. Here are two of the typical types of coverage available.
First-Party Response Insurance
Policies can vary according to the type of business, but in general, a first-party response policy covers financial compensation to help address immediate business needs. For example, a first-party policy can help with:
- Determining whether a breach occurred and assisting with regulatory compliance if a breach is verified;
- Costs incurred from notifying affected people, such as employees and customers;
- Costs incurred from crisis management and public relations campaigns to educate customers and rebuild a reputation;
- Costs incurred from business interruptions;
- Reimbursement from cyber extortion such as malicious viruses, hacking of customer data, and corruption to computer systems.
Third-Party Defense and Liability Insurance
These policies can also vary, but in general, a third-party policy protects clients against lawsuits brought about by a customer or partner due to a security breach. Coverage can include:
- Costs incurred from judgments or settlements the client is obligated to pay;
- Costs incurred from electronic media liability such as copyrights, trade names, slogans, and Internet sites;
- Costs incurred from employee privacy liability.
For more information, contact an insurer that offers cyber risk policies.