GMS Blog What Is Cyber Liability Insurance and Why Does Your Business Need It?

Cyber threats are a growing concern for businesses of all sizes. A 2024 survey revealed that 39% of small companies have experienced both security breaches and data breaches. From ransomware attacks to data theft, companies face growing risks that can lead to financial losses, operational disruptions, and reputational damage. Cyber liability insurance helps protect businesses by covering the costs associated with cyber incidents, allowing them to recover quickly and minimize potential harm. What Is Cyber Liability Insurance? Cyber liability insurance is a specialized type of business insurance that provides financial and legal protection in the event of a cyberattack or data breach. Unlike general liability insurance, which often excludes cyber-related incidents, cyber liability insurance specifically addresses risks like hacking, phishing scams, and ransomware. Why Is Cyber Liability Insurance Important? As businesses use more digital systems and online transactions, cybercriminals have more chances to find and exploit weaknesses. Cyber liability insurance safeguards businesses against the costs associated with actual or suspected privacy regulation violations resulting from security breaches. These breaches may lead to the unauthorized release of protected personal information, which includes any private, non-public data under the care, custody, or control of the business. Small and mid-sized businesses are particularly at risk, as they may not have the same security resources as larger corporations. A cyberattack can result in: Significant financial loss: Data recovery, business downtime, and legal expenses can be costly. Reputational harm: Customers may lose trust in a business that experiences a data breach. Regulatory fines and legal penalties: Many industries require businesses to follow strict data protection laws, and violations can lead to penalties. Operational disruptions: Cyberattacks can shut down business operations, causing delays and lost revenue. Cyber liability insurance provides essential protection, ensuring businesses have the resources to respond effectively to cyber incidents. What Does Cyber Liability Insurance Cover? Cyber liability insurance typically includes coverage for: Worldwide coverage: Protects your business globally against cyber threats. Cyber event expenses: Covers costs related to managing and mitigating cyber incidents, including notification and credit monitoring, forensics expenses, associated legal expenses, and call center and public relations support. Ransom payment: Helps cover ransom payments and recovery costs in the event of cyber extortion or ransomware attacks. Cyber deception: Provides protection against deceptive cyber practices aimed at your business, including fraudulent instruction, funds transfer fraud, and telephone fraud. Regulatory fines and penalties: Covers fines and penalties imposed by regulatory bodies due to a cyber incident. How GMS Can Help Protect Your Business At Group Management Services (GMS), we know how critical cybersecurity is for businesses. As cyber threats become more sophisticated and evolve with advancements in artificial intelligence (AI), protecting your business is more important than ever. Our cyber liability insurance provides comprehensive coverage to help protect your business against the financial and legal consequences of cyberattacks. From data breaches to ransomware and business interruptions, GMS offers tailored protection to keep your company safe and secure. Don't wait for a cyber incident to impact your business. Contact GMS today to learn how our cyber liability insurance can safeguard your company.