Are you covered if your Business has a data breach?

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Let’s go over the difference between general liability insurance and cyber liability insurance.

Why Your General Liability Insurance
Doesn’t Cover Data Breaches

When thieves are looking to steal financial data, one of the best places to turn is retailers, naturally. After all, they tend to collect quite a bit of customer data, including things such as credit card numbers. Once a thief gets a hold of these numbers, it means that those customers are all at risk of having money, and even their identities stolen. This sort of thing happens far more often than you might expect, so it is important to make sure that you have some manner of keeping your business safe if this were to happen. Having insurance can be a great way to circumvent this problem. However, you have to be very clear about what your policies do and do not cover.

What Does General Liability Cover?

When most people think about liability insurance, they simply assume that it will cover them for anything that might happen at their business. That’s simply not the case. All policies state very clearly what they do and do not cover and it is up to you to make sure you understand those policies. For the most part,general liability will cover your company for any bodily injuries that happen in the business. This can include things such as slipping and falling. The policies will also include property damage coverage. This means if your business loses someone’s property, or damages the property, the policy can help to pay for the replacement costs or for the legal costs if it goes to court.

This is actually where some misinterpretation arises. People assume that since the policy covers property damage for “loss of property” that it would cover data breaches. After all, theft of data is essentially loss of property. However, that’s not actually the case, as the client’s data is not actually property. Instead, it is merely their information, and legally, the two are different.What does this mean for you? It means that your general liability coverage
policy doesn’t do anything to protect you from a data breach.

Does this
mean that you can’t do anything to protect your company from the dangers of a
data breach? Fortunately, there is an answer, and it might be something that
you should consider.

Data Breach Insurance

This type of insurance, also called cyber liability insurance, is able to provide a company the help they need after they’ve suffered a data breach. There are two different types of policies that companies can choose. The first party response policy takes care of the costs associated with letting all of those who are affected by the breach know. It can also offer credit monitoring services, and help to rebuild a business’s reputation. After a data breach, it’s quite common for the public perception of the company to drop, so this becomes very important. The second policy is a third party defense, which can cover the company’s legal expenses in the event that someone decides to sue the company after one of these breaches.

If you want to have any measure of protection against data breaches, then you really do need to make sure you have these alterative types of policies. They are the only thing to offer actual safety. Given the sheer number of instances of these types of cases today, it’s not a matter of if your company will undergo a data breach. Rather, it is a matter of when it will happen. Talk with an insurer today
about what they can offer, and make sure you understand everything that the policy is able to cover, so you can be sure that your business will be able to
go on after a breach.