Question: Any tips for purchasing business liability insurance? I just picked up a sub-contracting assignment as a community manager for a large tech company. As a part of this assignment, I am required to carry general business liability. This in theory is not a big deal. While getting a quote the underwriter has said they also require cyber liability and another policy. Those additional requirements raised the annual premium from just $500.00 to $3,000.00. That’s a pretty hefty tax and I’m wondering if anyone has any tips or suggestions, even in the form of a new agent recommendation… Thank you!
Answer: Let’s first discuss what cyber liability insurance is and what it covers to see if it is necessary for your business. Many sub-contracting jobs will require a general business liability insurance policy but there are many cases were that policy will not cover all of the necessary risks of your business. It is important to be aware that Cyber Liability Insurance is a unique policy that is not covered under a standard insurance product. It should be designed to meet your business’s specific needs but generally it covers against first-party and third-party risks.
First-party coverage may cover items such as the loss of business income from a data breach, the cost to hire a firm to recover data from a computer infected with a virus or the cost to hire a firm to manage public relations after a breach has occurred. Third-party may cover items such as network security breaches or the costs resulting from a legal proceeding alleging the violation of a privacy law. With how sophisticated cyber-crime has become, it can happen to your business despite your best efforts to stop it. Many have heard of the recent attacks on Target, Yahoo, LinkedIn and Dropbox and the list will continue to grow. With technology becoming an increasingly important part of many businesses, cyber liability insurance will become a mainstream insurance policy in the near future.
I always recommend discussing your business with a local insurance broker that can go in depth on your exact business needs. It is not always a bad idea to obtain a second opinion from another insurance broker as well just to make sure you are properly covered. My agency, Smart Move Insurance, believes that it is in your company to consider how your business uses technology and the possible threats that come with it. The value of your data and the potential costs of replacing that data can be extremely expensive, according to a 2010 Symantec SMB information protection survey, an average loss sustained is $188,000 per breach.
If you are in Arizona, please feel free to contact a licensed broker at Smart Move Insurance at our Scottsdale, Arizona office or by phone at 480-397-9525.