Cyber Insurance in Vermont

What is Cyber Insurance?

Cyber insurance is a specialized form of commercial coverage designed for threats that come with conducting business over the internet. Policies generally help protect businesses in Vermont from data breaches and online attacks.

Cyber insurance is still a relatively new form of coverage. As businesses become increasingly reliant upon online data and processes, though, this coverage is becoming increasingly common.

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What Businesses in Vermont Need Cyber Liability Insurance?

Most businesses in Vermont can benefit from having a cyber liability policy, for there are few businesses left that don’t use at least some online data. Even restaurants that take customers names and contact information via online reservation systems may want a policy in case diners’ details are ever compromised. Some other examples of businesses that may want coverage include:

  • Medical offices and hospitals, which handle legally protected patient information
  • Banks and financial institutions, which handle customers’ account numbers and details
  • Stores and online retailers, which process customers’ credit and debit card numbers
  • Real estate brokers and agencies, which handle clients’ real estate contracts

In addition to businesses, many nonprofit organizations and government agencies may also want to consider getting this coverage. Both nonprofits and governments frequently process highly sensitive data that they could ill-afford to have compromised in a breach or attack.

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What Coverages Are Found in Cyber Liability Insurance Policies?

Because cyber liability insurance is relatively new, there isn’t a single set of protections that every policy protects against. Instead, there are several coverages that a policy might offer coverage

  • Errors and Omissions Coverage, which may cover mistakes in work performed
  • Media Liability Coverage, which may cover copyright or trademark infringement
  • Network Security Liability Coverage, which may cover hackings and other online attacks
  • Extortion Liability Coverage, which may cover ransomware and similar attacks
  • Privacy Liability Coverage, which may cover data breaches not related to online attacks

(Errors and omissions coverage is often only purchased by companies that offer IT-related services, such as software developers, network security providers and IT consultants.)

What Expenses Does Cyber Liability Insurance Reimburse or Pay For?

Just as their coverages can vary, the expenses that cyber liability policies will reimburse or pay for can also differ from one policy to the next. Depending on a particular policy’s terms and conditions, it might offer compensation for the following expenses associated with a covered claim:

  • Revenue lost because a business’ reputation is negatively affected
  • Revenue lost because operations are temporarily halted or slowed
  • Reparations paid to impacted customers and clients
  • Costs arising from offering affected parties complimentary credit monitoring
  • Costs arising from hiring professionals to identify and address a security threat

Does Cyber Liability Insurance Duplicate Protections in Commercial Property Policies?

Although many commercial property policies offer coverage for computers and hardware, cyber liability policies generally don’t duplicate protections found in commercial property policies.

Most commercial property policies only cover the hardware itself -- and not data stored on the hardware. If they do offer any protection for stored data, it’s typically minimal. Cyber liability policies are specifically designed to fill this coverage gap and help protect the data that businesses have on computers or servers (or in the cloud).

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How Can Vermont Businesses Get Cyber Insurance?

Because cyber insurance is a fairly new form of coverage and has yet to be standardized, it’s especially important to work with an agent who specializes in this coverage when looking for a policy. Businesses in Vermont should contact an agent who’s independent and familiar with cyber liability policies. Such an agent will be able to compare different insurers’ policies, and they’ll know what differences to look for in various policies.

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