As cyber threats become increasingly common, businesses are looking for ways to keep themselves protected. Although both types of insurance provide protection, cyber insurance and general liability insurance deal with different types of risks. In this article, we’re taking a closer look at the differences between cyber insurance and general liability insurance. We’ll discuss why it’s important for businesses to understand the difference and what you need to know to pick the right coverage. Stay tuned to learn more about how you can protect your business from cyber threats.
General Liability Insurance
General liability insurance is typically required by law. It’s intended to protect businesses against liability related to accidents that might occur on their property or as a result of their business operations. This type of coverage helps protect businesses against claims like bodily injury or property damage.
It can cover a wide range of incidents, such as slip-and-fall accidents or property damage caused by employees. However, it typically doesn’t cover damages related to cyberattacks.
Cyber insurance is different. It is specifically designed to protect businesses against the financial losses associated with cyber crime. Cyber attacks are complex and recovering involves a lot of pieces. Coverage can include a wide array of incidents, from data breaches and ransomware to downtime that your business may suffer as a result.
These policies may also cover a variety of expenses. These include forensic investigations, legal fees, breach notification costs, credit monitoring, and the list goes on. Depending on your coverage, it may also include protection for loss of income or other extra expenses incurred during and after a cyber attack.
The Difference Between Cyber Insurance and General Liability Insurance
As noted above, the main difference between these two types of policies in the types of incidents they cover. Occasionally, a general liability policy may include a small cyber liability rider. However, that coverage is usually so insignificant that it won’t help your business. It’s much better to take out a dedicated cyber insurance policy to be covered properly.
Why does it matter?
Cyber threats are continuing to grow in frequency and impact, both financial and operational. They are getting more sophisticated and it is becoming increasingly important for businesses to protect themselves from cyber attacks. While general liability insurance is an important for of protection, it’s not sufficient to cover the losses related to cyber crime. Cyber insurance is critical layer for properly protecting your business in the digital age.