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Anything from a privacy breach (a failure to protect personally identifiable information) to a full security breach (unauthorized access to or release of sensitive or confidential data) can constitute a data breach and can cause a third-party liability loss.
Third-party cyber insurance provides liability coverage for businesses that are responsible for a client’s online security. This coverage would provide protection for potential liability connected to a data breach (a hack, a successful phishing attempt, or other attacks), including costs the customer would incur in cleaning up the aftermath of such a cyber event.
In the case of a lawsuit resulting from a breach, third-party cyber coverage can help pay for settlements (if you settle outside of court), lawyers’ fees, associated court costs and even judgments, if the party is found fully or partially liable for the breach. It can also help pay for costs incurred while notifying the end user that their information has been shared, as well as help with the purchasing of credit monitoring services for those affected by the breach.
For small and mid-sized companies, especially small IT firms or individual IT contractors, having to pay for this sort of damages after the fact could be devastating to their business and possibly even force them to close their doors for good. There are precautions you can take, from aggressive firewalls to security protocols to banning social media and outside emails, but when you work with sensitive and valuable customer data, hackers are always trying to find a new way in.
Advising your IT and tech-related business clients to protect themselves in case of a security or privacy breach is essential when they work with customers’ data, from personal identifying data (names, addresses, email addresses) to payment information (credit card information). Make sure not to overlook third-party cyber coverage as a valuable addition to a business’s insurance portfolio!
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed and place business in specialized markets. For more information about our products or to become an agent, please contact us today at (855) 248-1480.