Cyber liability insurance can protect your business against the financial losses caused by breaches of your network security, infringements of data protection laws, employee abuse of email or libelous content on your website. These losses might be revenue losses or they might be fines.
Viruses, malware and identity theft are common causes of electronic damage. Cyber liability insurance can protect your business not just against external attacks, but also against unintentional damage caused to third parties by your own electronic communications.
Cyber liability insurance can also cover the costs of data restoration, reputation management and crisis management in the wake of an incident.
If you are a financial adviser and your computer were attacked by a virus, corrupting valuable customer data and disabling your email, your business would suffer from the downtime incurred and the costs involved in repairing the damage. Or if you are a portrait photographer and an employee were to circulate a picture of a client, you could be liable for a privacy claim.
93% of large corporations and 87% of small businesses reported a cyber-security breach in 2012. The cost of such a breach for large corporations is £450,000 to £850,000, while for small businesses it is £35,000 to £65,000*.
*Source: Cabinet Office
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This article has been compiled using information available to us up to 01.07.15.