What is Third-Party Cyber Liability Insurance?
Dec 18, 2020
Learn about Third-Party Cyber Insurance.
If you’re wondering “What is third-party cyber liability insurance and why do I need it for my small business?” you must be concerned about protecting your client’s sensitive information. We understand that as a small business, the relationships you have with your clients are incredibly valuable, and you want to preserve the trust you have developed with your clients however you can! Unfortunately, sometimes cybercrime does occur, and dealing with the fallout of a cyber attack is stressful enough without having to worry about the financial impact a lawsuit from a client may have on your business. This is why it is so important to consider having third-party Cyber Liability Insurance. We want to make sure you have all the information you need to know about Third-Party Cyber Liability Insurance - such as what it provides coverage for, what businesses it is suited for and whether or not this insurance would be right for you.
What is Third-Party Cyber Liability Insurance?
Third-Party Cyber Liability Insurance offers coverage for companies that are responsible for their client's online security. This includes safeguarding clients from cyberattacks and data breaches. If a client suffers a cybersecurity breach and files a lawsuit against your business, Third-Party Cyber Liability Insurance can pay for your business's legal expenses and more.
What does Third-Party Cyber Insurance include?
Third-Party Cyber Liability coverage can include:
- Lawyers' fees
- Settlements if you and the client settle out of court
- Judgments if you're found liable for the breach
- Other court costs such as witness fees, docket fees etc.
With phishing attacks, ransomware and data breaches happening more frequently each year, it is important to have coverage that will ensure your business can survive the financial repercussions of cybercrime.
For example, if one of your clients is hacked and sues your business, the resulting legal bills could be devastating.
Let's say you're a technology specialist hired to help your client step up a cyber security procedure. As part of your role you suggest antivirus software that has weaknesses, which are well documented. If your client's system is compromised and sensitive data is taken, the client may blame you and file a lawsuit.
Who needs Third-Party Cyber Liability Insurance? Who is Third-Party Cyber Insurance most suited for?
Third-Party Cyber Liability coverage is important for any company that works with sensitive client information. Some common examples are tech companies, healthcare companies, financial institutions and online retailers.
Third-Party Cyber Liability Insurance is almost always part of a tech company's insurance solution as many technology businesses work with client data, leaving them more vulnerable to lawsuits that could compromise their reputation and financials.
Some other businesses that especially benefit from a Third-Party Cyber Insurance policy include:
- Security consultants
- Information technology consultant
- Software developers
- Application developers
- Web-hosting businesses
- Network consultants
- Website designers
Determining whether or not Third-Party Cyber Liability Insurance is right for your business may feel like a daunting task. It can be challenging to have to evaluate threats against your business, or your clients’ business. We know it can be overwhelming to have to consider the outcome of an unexpected cyberattack or data breach. Fortunately, you don’t have to work through this process alone. Our Foxquilt insurance experts can assist you in finding the right solution to your business’s insurance needs. At Foxquilt, we want to ensure that you find the right coverage for your business, and will do whatever we can to help make the process of finding tailored insurance as simple as possible. That way, you can have the peace of mind that comes with knowing you and your hard work are protected. Get started on your online quote today with Foxquilt.
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