The beginner’s guide to cyber liability insurance

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Cyber Liability Insurance (CLI) covers the financial loss that results from data breaches. However, cyber liability is not typically included within general liability insurance and must be purchased separately. Also, each company offering a policy has different coverage options and exclusions.

Why invest in cyber liability insurance?

Experts estimate that the damage inflicted by cyber crimes will add to about $8 trillion globally in 2025. That’s higher than the GDP of the world’s third-largest economy, Japan, which sits at $5.38 trillion. These statistics stress why small to medium-sized businesses (SMBs), in particular, must have cyber liability insurance: 40% of cyberattacks target SMBs. In comparison, 60% of SMBs have experienced cyberattacks in the past 12 months, with 45% of SMBs saying their processes are ineffective at stopping attacks.

Liability insurance could differ between your business sinking or staying afloat after a security incident. Without it, the expenses you might have to bear after an incident could financially harm your business in the short term or, in the worst case, result in permanent closure.

Costs of post-data breaches include (1) Downtime, (2) Investigation, (3) Recovering data, (4) Legal procedures, (5) Notifying stakeholders about the incident, and (6) Restoring the personal identities of those affected. A good liability insurance policy usually covers these expenses. But remember that before you commit to a policy, you must get clarity from your insurer about what they cover.

Does your business need it? 

Any venture with cyber exposure must consider having cyber liability insurance. However, CLI should be your top priority if your business handles or stores sensitive information online, such as electronically protected health information (ePHI) or personally identifiable information (PII).

Make sure your CLI has the following essential coverage:

First-party coverageNetwork security and privacy liability cover costs like forensic investigations, public relations, credit monitoring, legal fees and fines/penalties. Business interruption losses and extra expenses cover lost revenue and added costs to continue business. Digital data recovery and cyber extortion expenses cover losses such as ransom paid because of ransomware.

Third-party coverageCovers claims of lawsuit expenses resulting from breaches in client systems or networks. Media liability covers libel claims, copyright/trademark infringement, etc., resulting from media use.

Cybercrime coverageCovers losses from digital theft of money or securities and social engineering fraud. But remember, just committing to a policy is not enough. You will also have to track/measure compliance with the agreement to ensure your contract is always valid and will payout in the event of an issue.

At Cyology Labs, we advocate for proactive cybersecurity measures. Ensure your software stays fortified with regular updates. Our expert team stands ready to conduct comprehensive security audits on your network, delivering immediate insights and tailored recommendations. We prioritize your protection by updating existing software and swiftly deploying patches to neutralize vulnerabilities. Moreover, our vigilant monitoring extends across every crevice of cybersecurity round the clock, every day of the year. Safeguard your data’s integrity with our relentless oversight. Visit us at to fortify your defences and entrust your cybersecurity to the experts.



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Terry Cutler

I’m Terry Cutler, the creator of Internet Safety University, an educational system helping to defend corporations and individuals against growing cyber threats. I’m a federal government-cleared cybersecurity expert (a Certified Ethical Hacker), and the founder of Cyology Labs, a first-line security defence firm headquartered in Montréal, Canada. In 2020, I wrote a bestselling book about the secrets of internet safety from the viewpoint of an ethical hacker. I’m a frequent contributor to National & Global media coverage about cyber-crime, spying, security failures, internet scams, and social network dangers families and individuals face daily.