Cyber Insurance in Massachusetts

What is Cyber Insurance?

Businesses today are commonly exposed to cyber-related risks that they often didn’t face just a short while ago. Cyber insurance policies help protect businesses in Massachusetts from these relatively new cyber-related risks.

Cyber insurance policies are highly specialized liability policies that have been developed to shield businesses from certain risks that accompany the advent of the internet. Because this is a relatively new type of insurance, there isn’t a single set of protections that all policies offer. Therefore, businesses should carefully review multiple policies with a specialized insurance agent before choosing a particular one. An agent who’s familiar with what different cyber policies offer will be able to make informed recommendations regarding policy selection.

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What Massachusetts Businesses is Cyber Liability Insurance Right For?

Since almost every business is exposed to online and other cyber-related threats, this is an insurance that most businesses in Massachusetts can benefit from. From small mom-and-pop operations to major corporations, almost every business could be affected by a cyber attack or data breach and need protection.

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Cyber Insurance Massachusetts

What Risks Does Cyber Liability Insurance Help Protect Against?

As mentioned, the coverages that cyber liability insurance policies offer vary and their protections can differ. Depending on a particular policy’s coverages, terms, conditions and exclusions, it might offer protection against:

  • Unauthorized Access of Data (e.g. online attacks)
  • Theft of Digital Assets (e.g. digital files are stolen by an employee)
  • Human Error (e.g. an employee accidentally makes sensitive data public)

In most cases, policies have coverages for nefarious attacks as well as innocent mistakes made by employees.

Some policies also offer third-party coverage for specific incidents. For instance, policies might provide one or more of the following additional liability protections:

  • Employee Privacy Liability (which often covers breaches of employees’ personal information)
  • Network Security Privacy Liability (which often covers breaches violating state, federal or foreign regulations)
  • Electronic Media Liability (which often covers false advertising, trademark infringement, defamation and plagiarism claims filed over digital content)

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What Costs Do Cyber Liability Insurance Policies Help Pay?

Should a business suffer a covered claim, there are several costs that cyber liability policies might cover. A few expenses that policies may help pay include:

  • Security Events Costs (i.e. financial penalties, regulatory fines, public relations expenses and customer notification expenses)
  • Lost Revenue Caused by Downtime (i.e. sales lost because digital operations were slowed or stopped)
  • Loss of Digital Assets (i.e. assets lost due to computer damage or file corruption)

Does Commercial Property Insurance Cover Digital Files?

Most commercial property insurance policies include at least some coverage for computers and related hardware, but commercial property coverages are typically limited to the physical components of these machines. Digital files normally aren’t covered by these policies, which is one reason why supplementing a commercial property policy with a cyber liability policy is frequently a wise decision.

Cyber Insurance Massachusetts

Are Cyber Liability Policies Expensive?

Although cyber liability premiums are based on many factors and can vary, most businesses can find coverage that fits within their budget. Premiums are usually reasonable, and they’re certainly less than facing a major cyber liability claim without any protection in place. In 2018, the average cost for each lost or stolen asset was $148 per record.

How Can Businesses in Massachusetts Get Cyber Insurance?

For help finding cyber insurance that offers the protections your business needs, contact the independent insurance agents at Dempsey Insurance. Our team has assisted many Massachusetts businesses with these types of policies, and we’d be happy to help you. Since we're an independent agency, our team members can recommend the best available policy regardless of what insurance company offers it.

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