Computers are an essential component of most business’ infrastructure today. Businesses use them to reach customers, schedule employees, forecast sales, order supplies, manage inventory, and many other tasks. Computers also expose businesses to certain risks, though. Should a business’ computer system be compromised, the business, its suppliers, and its customers may be affected by the breach. Cyber insurance helps businesses in Massachusetts protect themselves from lots of the risks that come with using computers.
Cyber insurance is a form of liability insurance that protects businesses from many of the risks that using computers exposes them to. Just a few years ago, cyber policies were relatively obscure. As businesses become more and more reliant on computers, and conduct an increasing amount of business online, these policies are becoming more common.
Most businesses in Massachusetts should at least consider getting a cyber liability policy. Almost all businesses in the area use computers and digital information and, therefore, are at some risk of having their data compromised.
Cyber policies are specifically designed to protect digital assets, or data. In many cases, policies won’t even cover the physical hardware that data is stored on, because they aren’t meant to insure physical items. Instead, their coverages focus on providing financial assistance if a business’ digital information is compromised.
If a business’ data is compromised in a cyber attack or other covered incident, a cyber policy might:
Most cyber liability insurance policies will cover hackings that compromised a business data, but this isn’t the only type of incident that this insurance can protect against. Depending on a policy’s terms and conditions, it might also cover:
Commercial property insurance policies may offer coverage for computers and other hardware, but these policies aren’t designed to insure against the digital risks that businesses face. Just as cyber insurance typically doesn’t cover physical hardware, commercial property insurance usually doesn’t cover digital information. The two types of insurance instead work together, with one covering data and the other covering the hardware that data is stored on.
For example, a business in Massachusetts might have a list of customer names and credit card numbers stored on a local computer. If the computer were stolen, a commercial property policy might cover the cost of purchasing a new computer. Meanwhile, a cyber policy may cover the cost of getting those individuals’ credit card monitoring because their information was compromised.
Cyber liability insurance is available through many business owners policies and commercial package policies, and cyber policies can also be purchased as stand-alone policies. Businesses in Massachusetts should work with an independent commercial insurance agent in the area to find out which of these options will provide the most comprehensive and affordable coverage. An independent agent can compare business owners policies, commercial package policies, and stand-alone policies from different insurers, and explain the nuances of each option so that business owners can choose the one that best meets their needs.