Do consultants need cyber liability insurance?
Consultants get paid to stay two steps ahead of the competition. If you’re reading this, you’re probably a consultant, which means you are a performance mastermind. Like consultants, cyber criminals are always looking for ways to stay ahead of internet security. They continually find ways to hack payment information, medical records, and other private customer information.
That’s why it’s important to look into a cyber liability insurance policy if you handle any type of sensitive client information.
What is cyber risk?
Cyber risk is the likelihood that an unauthorized person will gain access to secure client data. When an unauthorized person gains access to secure data, it’s referred to as a “data breach” or “cyber attack.” Data breaches can lead to much bigger problems, such as fraud and identity theft. That’s something you wouldn’t want on your conscience.
Consultants are exposed to risk by handling secure client information and data.
If you experience a data breach, hacked network, or lost client data in any way, shape, or form, you’ll be held liable. Even if the situation is out of your control, a client will look to you for damages. And it can be very expensive.
Luckily, cyber liability insurance will cover these types of losses.
How does cyber liability insurance protect consultants?
Here are some of the costs associated with a data breach that your cyber liability insurance policy may help with.
- Damages to your computer as a result of a cyber attack.
- Business interruption expenses. Cyber liability insurance helps cover any loss of revenue from downtime due to the attack or a denial of service virus (like ransomware).
- Notification expenses. If a customer’s data was compromised, you must notify each person by mail. This can really add up.
- Credit monitoring expenses. You will have to provide credit monitoring for the affected people for a period of time after the data breach.
- Public relations costs. A security breach can severely damage your name. Cyber liability insurance can help with the cost of a campaign to rebuild your reputation.
- Expensive lawsuits. Your policy will cover you if/when your clients decide to sue you. Even if you win, the costs for defense are significant.
- Fines and penalties. Any resulting fines and penalties would be covered.
- Cyber extortion expenses. If a hacker demands a ransom in return for your information, you may be covered.
It’s always better to stay protected when you’re in business for yourself.