Cyber Liability Insurance

What is Cyber Liability Insurance?

Cyber Liability Insurance provides coverage for first and third party liability that arises out of the use of e-business, the Internet, networks, information assets and other types of internet communication.  The financial impact of privacy and security breaches to a business and in turn to their customers and clients and to the business’ brand equity and reputation, can be long term and severe.

Although creating your own website can be simple, the exposures that come with it are difficult to navigate.  As these liability exposures are evolving with technology, they are often complex.

As per the Personal Information Protection Act (PIPA), your company has a legal responsibility to: “protect personal information that is in its custody or under its control by making reasonable security arrangements against such risks as unauthorized access, collection, use, disclosure, copying, modification, disposal or destruction”.

 As legislation changes or is created, new potential liabilities are also created.

Typical commercial business products do not include cover for the exposures revolving around internet business.  Therefore new products are being created by insurers to address the issues surrounding Cyber Liability Insurance.

Who requires Cyber Liability Insurance?

• Any organization or company that collects personal information subject to privacy legislation
• Any organization or company that uses a website to disseminate information as they face the same legal exposures as a publisher
• Any organization or company with e-mail, networks, and/or a website

What are typical Cyber Liability Insurance exposures?

• Risk and liability associated with processes and commerce through computer networks
• Business interruption
• Damage to intangible property
• Data breach
• Release of virus

What coverages are provided with a Cyber Liability Insurance policy?

First party cover:

• Costs associated with data breach
• Access to service providers such as credit monitoring facilities, call centres, forensic accountants, law firms and public relations and crisis management companies

Third party Cover:

• Legal defence costs
• Regulatory fines

Ultimately an organization needs to ensure proper privacy and data security practices and procedures as well as sound risk management practices.  Cyber Liability Insurance should be a contingency and not a replacement for processes which guarantee business continuity and a professional reputation.

To help protect your business in Alberta, British Columbia, Nova Scotia and New Brunswick, Pirbright Professions Inc. can provide small businesses with Cyber liability Insurance as a standalone policy.  Alternatively, it can be purchased together with other lines of coverage such as Professional Liability or Errors & Omissions coverage, Commercial General Liability Insurance, Office Property Package policies, and Directors and Officers Liability Insurance coverage.  All companies have potential exposures in all of these areas.

Should you have any queries or require any further information, please contact us.