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Cyber FAQs

What is Cyber Liability Insurance?
Cyber Liability Insurance is a comprehensive insurance program protecting an insured against the third party legal liability and first party costs exposures arising from a network security, privacy liability breach or other covered causes of loss.

I don’t store customer records. Why do I need to buy Cyber Insurance?
Cyber Insurance covers many different exposures through its multiple coverage parts. Although an insured who does not store customer records does have less exposure, the transmission of a malicious code, a rogue employee, or even a cyber extortion event can be very costly to an insured.

We don’t do financial transactions. Why do I need to buy Cyber Insurance?
Financial transactions, although a coveted risk by hackers, are not what the bad guys really want. It is personal confidential information they seek in order to perform identity theft. This includes records of your employees, customers, vendors, and others in your control, including protected health information.

Does a Cyber policy cover theft of data by an employee?
Crime policies cover theft of money and securities by employees of an insured. However, they do not either cover, or underinsure, the theft of intellectual property or of identity. A Cyber program includes these important exposures due to the rogue employee risk every business faces.

What is the difference between Third Party Legal Liability and First Party Costs coverage?
In Cyber Insurance, third party legal liability refers to the liability imposed upon an insured as a result of their failure to protect the information of a third party, or the liability arising from a personal and advertising injury. The coverages that respond to this exposure are Multimedia Liability, Network Security & Privacy Liability, and Regulatory Fines and Penalties coverage.

First party costs are the insured’s direct out of pocket costs as a result of a third party event. These include any or all of the following: Breach Response Costs, Loss of Digital Assets, Business interruption, Cyber Extortion and Cyber Terrorism.

What happened to Internet Liability Insurance?
Internet Liability Insurance was the precursor to a Cyber Insurance program and was first introduced in the late 1990’s and early 2000’s to insure against website content. In today’s world, it is primarily included as a part of the Multimedia and Network Security & Privacy Liability coverage parts.

What is the minimum premium?
Unlike other Specialty Lines, Cyber Insurance is made up of many different components comprising the third party legal liability and first party costs coverage parts. Premiums vary by size of risk, industry class, number of records stored, controls, and the specific coverage parts quoted. Generally speaking, a Cyber Insurance program minimum premium starts at or under $1,000.

What is considered a record?
A record is considered to be any information stored by the Insured on any third party, first party or employee that qualifies as PCI (Personal Confidential Information). PCI comes in two different types- PII (Personally Identifiable Information) and PHI (Personal Health Information). This includes names, addresses, birth dates, credit card or other financial information, social security information drivers license numbers, or health records, treatments, blood types, lab results, or other personal health information, which could lead to a potential privacy breach of a third party or an employee.

What is the potential cost of a loss?
Breach response costs incurred to respond to a security or privacy breach can be very expensive. The estimated cost to respond to these varies by type of event and information exposed, as well as many other factors. The only cost that can really be estimated is the minimum expected out of pocket cost for Privacy Breach Response Costs. When a breach occurs and data is compromised, there will always be this cost. Use the PBRC Calculator, our valuable tool found under the Members Area of the website to determine the cost for your customer.