Article sponsored by Northbridge Insurance

The scope of cyber risk today is wider than ever, and an awareness of those risks – plus mitigation best practices – is vital if your customers are to stay one step ahead in their business. Unfortunately, it can be hard to keep up with the evolving threats, not to mention how best to combat them with the right sort of coverage. You can help your customers get the support they really need with this cyber coverage primer.

An overview of different cyber-related programs

What goes into a cyber risk program? That depends – different programs have different features. Here’s a brief overview of a few main categories of cyber programs:

Cyber Programs: focus on services and systems related to technology and their use in business. Customers are also commonly covered for damages if they inadvertently transfer a virus to a network owned or operated by someone else.

Data Breach Programs: often used interchangeably with privacy breach programs and/or security breach programs. These can provide protection for businesses in the event sensitive data is compromised or exposed.

Privacy Breach Programs: more broadly defined than others, a privacy breach program can protect businesses in the event customer, consumer, or patient data is compromised or exposed.

What type of coverage does a business need?

Like cyber programs, cyber coverages differ in their reach and focus. Understanding the different types can help narrow down best options:

Cyber coverage

This coverage typically focuses on services and systems related to technology and their use in business. Risks addressed include website and software design, network equipment, and damage caused by service interruptions and computer devices.

Privacy breach coverage

This protects businesses in the event customer, consumer, or patient data is compromised or exposed. Costs associated with first-party response and third-party liability exposures may also be covered under such a policy.

First-party coverage

Provides for legal expenses associated with regulatory compliance, such as federal mandates and financial industry regulations, including contractual agreements surrounding compliance.

Third-party coverage

Focuses on liability costs related to defending against consumer-based litigation or regulatory actions that arise as a result of a breach.

Cybercrime or cyber risk coverage?

The terms sound alike, but there’s a difference: cybercrime is a peril within crime policies, while cyber risk is something separate.

Social engineering is a good example of where these coverages differ: when social engineering results in a financial loss, it would fall under cybercrime. However, if social engineering leads to a loss of confidential data, this would be considered a cyber risk peril.

Cyber coverage for every business size

When it comes to cyber risk, size matters. Larger companies tend to gather, process, and store large amounts of information, so there can be more points of weakness. However, businesses of every size can benefit from value-add products that build out a basic cyber policy with features that can truly help in times of crisis.