Cyber Insurance in Texas

What is cyber insurance? 

The advent of the digital age has given rise to new risks, and thereby a new type of insurance. Cyber insurance can help protect Texas businesses from a host of online and digital threats.

Cyber insurance provides specialized commercial coverage for digital risks. As these risks continue to become more common, this insurance is becoming more important.

What businesses in Texas should carry cyber liability insurance?

Almost all Texas businesses, regardless of size or sector, have digital information that could be stolen, leaked or lost. Therefore, almost all businesses should have cyber liability in place.

For instance, consider why the following businesses in various industries might benefit from a cyber liability policy’s protections:

• Financial Advisor: A successful attack gets the names, social security numbers and account numbers of the advisor’s clients.
• Attorney: Their paralegal accidentally sends a confidential file over to opposing counsel, breaching confidentiality and potentially compromising a case.
• Doctor: A medical provider’s staff accidentally sends electronic health records to the wrong party, placing the practice in violation of HIPAA regulations.
• Gas Station: Someone places a credit card skimmer on a gas station’s pump or ATM, and steals customers’ credit card numbers.
• Remote Worker: A remote worker forgets their laptop at an airport lounge, creating an accidental data breach of whatever information is on the laptop.

Sometimes business owners think their business’s size will help protect them from cyber attacks, but hackers target businesses large and small. Small businesses can be targets since they likely have weaker security measures in place. Even the largest businesses can be hacking targets, because the payoff can be much bigger if an attack is successful.

What coverages do cyber liability insurance policies provide?

At its core, cyber liability insurance generally shields businesses against potential liabilities resulting from data breaches or similar incidents. Some of the coverages providing liability protection are:

• Employee Privacy Liability Coverage: Usually covers situations where employee personal information (e.g. Social Security numbers, direct deposit information, etc.) is exposed or compromised.
• Network Security Privacy Liability Coverage: Usually covers situations where a data breach constitutes a breach of federal or state regulation (e.g. HIPAA).
• Electronic Media Coverage: Usually covers situations where content that’s digitally distributed is deemed to be trademark infringement, plagiarism or defamation.

These sorts of incidents could lead to multiple liability costs, including credit monitoring, lost revenues, restoring files and more. Should there be a covered claim, the applicable liability coverage might cover expenses arising from legal fees, credit monitoring, restoration and other expenses. 

Do cyber liability insurance policies extend protection to other business’s actions?

Sometimes a business’s data is compromised not in its own breach, but rather in a data breach that another business has. For example, data stored on a cloud service could be compromised if the cloud service’s servers are attacked. 

In these situations, the business that actually has the breach generally should bear the brunt of any associated costs. The reality is, however, that the original business entrusted with the data might be sued. A lawsuit could be expensive even if the original business is ultimately vindicated.

Some cyber liability policies provide coverage for such third-party data breaches, but not all policies do. If this coverage is particularly important, businesses should work with a specialized insurance agent to find a policy that offers the protection.

What kinds of incidents are covered under cyber liability?

There’s considerable variance in what incidents different cyber liability policies will cover, but most policies offer protection against multiple digital and online risks. Some examples of incidents that a policy might cover include:

• Employee theft of digital data
• Online attack that breaches servers
• Human error resulting in an accidental breach

An insurance agent specializing in cyber liability insurance can check what incidents a specific policy would likely cover.

Where can businesses in Texas get cyber insurance? 

If you run a Texas business that doesn’t yet have cyber insurance, contact the independent insurance agents at Steve White Insurance. We’ll make sure your business finds protection against many digital and online risks.