Cyber Insurance in Massachusetts

What Coverages Does Cyber Insurance Offer?

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:

• Provide payments to make up for lost revenue if operations must be suspended
• Provide payments to compensate for a decrease in revenue caused by a tarnished reputation
• Compensate customers or clients who suffered a financial loss as a result of the incident
• Pay for credit card monitoring of affected customers or clients
• Cover the cost of hiring programmers to identify and address any security weaknesses

What Kinds of Businesses Need a Cyber Liability Policy?

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.

Do Businesses That Have Commercial Property Coverage Need a Cyber Policy?

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. 

How Can Businesses in Massachusetts Get Cyber Liability Coverage?

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.