The simple answer – because you have a smart phone and because you and your business operate online. 

The more detailed answer? Cyber liability policies apply to any individual or entity (LLC, C-Corp, S-Corp, etc.) that holds or handles Personally Identifiable Information (PII).  The term “Cyber Liability” encompasses 4 key components:

1. 3^rd Party Network Security and Privacy Damages (including damages and defense costs)
2. 1^st Party Breach Response Costs
3. 1^st Party Extortion Costs
4. 1^st Party Non-Physical Business Interruption Costs

Cyber liability policies originated in California, through state regulatory reform needs that became highlighted after the collapse of the dot-com bubble. Internet-based businesses needed another way to protect their balance sheets more accurately.  This coverage does not usually extend to cover monetary loss – the primary trigger in cyber liability policies is data loss. When a monetary loss stems from data loss, than coverage is available.  

The coverage limit, premium, and covered exposures vary drastically from business to business and carrier to carrier. Contact McFarlin Insurance to discuss your company’s cyber liability exposures and we’ll provide you with the knowledge and coverages you need to protect your business. Call us at 410-312-7800 today!

Thank you to the Howden Brokering Group Limited for providing material used in this post.