Virtually every company that uses technology to conduct business faces the risk of a cyber incursion. As technology advances, becoming more complex and sophisticated, unfortunately, so do the threats and the sophistication of criminal hackers. Smart business owners know it is wise to be prepared and protect against risk by putting cyber liability insurance in place.

Why Your Business Needs Cyber Liability Insurance

The cost of dealing with a data breach is typically enormous. It goes far beyond strengthening security procedures and repairing databases. Current regulations require companies to notify customers when a data breach compromises personal and confidential data. Standard business insurance may not be adequate to protect your company from the costs associated with the damage inflicted after a cybercrime.

Types of Cyber Liability Insurance Coverage

Different types of cyber liability coverage are available to fit your company’s specific needs. A cyber insurance policy may include distinct insuring agreements, business interruption coverage, as well as third-party and first-party coverage.

Distinct Insuring Agreements

This option allows a company to be covered at different levels for different risks. It provides greater protection, as a company can set a higher limit for a particular risk, based upon specific business needs.

Business Interruption Coverage

Cybercrimes may not be included in the business interruption coverage most businesses hold as one aspect of property insurance coverage. If a computer virus or denial-of-service attack impacts your ability to do business, this coverage applies to your expenses and lost revenue.

Third-Party and First-Party Coverage

Companies are obligated to keep their customers’ personally identifiable information (PII) and protected health information (PHI) confidential. If this information is exposed in a data breach, the company may be held liable for damages. This coverage provides protection against liability to others and reimburses the company for expenses incurred as a result of a data breach.

To obtain the right cyber liability coverage for your company, contact Klinger Insurance Group in Germantown, Maryland. Our local agent will work with you to tailor the coverage you need based on the risks your business is facing.”

Director’s and Officers Liability

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Wrongful act allegations and lawsuits have become increasingly more common and frequently name members of boards of directors or officers. In some cases, directors and officers could be held personally liable for damages. When such a claim arises, Directors and Officers (D&O) liability insurance can help cover the cost of defending against the legal action and cover the cost of awards or settlements arising out of the lawsuit.

All organizations and the individuals who lead them are vulnerable to D&O exposures. Private companies, public companies, nonprofit organizations, and financial institutions can all benefit from D&O liability insurance. The types of claims that arise may include:

• Securities litigation
• Allegations of misrepresentation
• Breach of fiduciary duty allegations
• Regulatory actions

Types of D&O Liability Coverage

A D&O policy for a privately held company may contain several different types of coverage such as a-side, b-side, and c-side.

A-Side Coverage

This covers directors, officers, and employees in some cases, when the company cannot indemnify them, for defense costs, judgments, and settlements.

B-Side Coverage

When the company does indemnify officers, directors, and employees, this portion of the policy covers the company for their losses.

C-Side Coverage

This is also known as “entity coverage.” It is designed to protect the corporation itself financially.

Cost of Directors and Officers Liability Insurance

The cost of D&O insurance can depend on a variety of factors, including:

• Type of business
• Company revenues
• Prior legal claims
• Amount of debt

The best way to find out how much your D&O liability insurance will cost is to obtain quotes from several different insurers. Our agent at Klinger Insurance Group in Germantown, Maryland, can help you evaluate the current market to identify a plan that provides the maximum D&O coverage for your money.