Posted on May 19, 2014
Obtaining the right business insurance in California can be a challenge if companies are unclear about what types of coverage they need to fully protect themselves from being held liable for claims or lawsuits. While most companies typically purchase general liability and commercial property insurance, there is one growing area that business owners face serious gaps in coverage - the internet and private data.
With technology growing at a pace faster than ever before, the business use of the internet has also grown exponentially. With the increased use of cloud computing for data storage and application use, the potential cyber risks California businesses is also increasing. The exchange of data through electronic means requires unique protection. Commercial property insurance typically does not cover privacy or security risks caused by the internet. Yet, the increase of hackers and viruses released through the internet make businesses particularly vulnerable to loss of confidential financial data and customer information.
Internet breach of data is becoming more common. In fact California passed the first law in 2003 for breach notification, SB1386. This legislation requires all businesses to notify affected people when their confidential information has been compromised. That means that should the offices of a doctor or lawyer be hit by a cyber-attack online that subsequently releases private patient or client data onto the internet, then the companies are required to notify those people affected. This sort of breach also creates the potential for lawsuits against the business owner.
Cyber liability insurance provides coverage for attacks by hackers, worms or viruses as well as restoration of loss data. It also adds liability coverage for breaches of privacy and security of clients whether due to an online attack or dishonest employees. Should private client data be released, this coverage will also pay for legal fees to defend from claims.
Purchasing cyber insurance to protect against potential internet related events makes sense in today's technologically savvy world. Contact our professional insurance agents to learn more about protecting your customer's data and your business technology as well.