Cyber Insurance 101


No business is safe from cyber-attacks. A data breach or network security failure exposes personal records of your employees and customers. Any company that is consumer facing and highly reliant on technology are vulnerable to attack.


Cyber liability coverage has existed for more than 20 years. In the past, companies purchased omissions and errors (E&O) insurance. Over time, coverage was expanded to include unauthorized access to client systems and destruction of data among other things. Most businesses that invested in cyber insurance in the early days were in the technology space.

Policies started expanding by providing clear coverage for breaches of confidential information about ten to fifteen years ago. This got the attention of companies in possession of considerable consumer data. Companies that otherwise didn’t provide services that warranted E&O coverage.


Today, cyber insurance typically covers four component areas: E&O, media liability, network security and privacy. The big changes have occurred in network security and privacy. What is unique is that cyber liability coverage applies to both first-party costs and third-party liabilities. This means your business is insured for direct costs related to privacy breach or security failure and against third-parties that might sue.

Cyber security insurance has expanded over the years to address some of the risks involved with an Internet-dependent world. Cyber-attacks and security failures happen. Make sure your business is covered.