More and more small business owners are talking about Cyber Liability these days.  Unfortunately they do not bring it up until something happens to them or something happens to a fellow business owner.   Austin, TX is home to many tech companies.  I believe it's only a matter of time before more business owners start looking at this insurance coverage.  

Most business entities have digital content stored on email servers, websites, laptops, cell phones or computer networks. This content is vulnerable to damage by viruses, hackers, identify thieves, and employee saboteurs. Damage to electronic data can disrupt a firm’s business operations, creating income losses and generating extra expenses. Data losses that involve sensitive information can result in lawsuits against the firm and damage its reputation.

We live in a digital age where there are perils everywhere.  Your standard BOP or General Liability policy probably does not include this type of coverage, so consider talking to one of our agents about Cyber Liability. Here is an overview of the coverage options:

First-party Coverages

• Crisis Management Coverage: Covers the costs of a public relations consultant to reestablish your business reputation. Intended to mitigate additional damages from the data breach. 

• Damage to Electronic Data: Covers the cost of replacing or restoring electronic data that has been lost, corrupted, altered, damaged or stolen due to a hacking event, a virus or other malicious computer code or a denial of service attack. 

• Business Interruption and Extra Expense: Covers loss of business income and extra expenses incurred during the period of restoration due to an interruption of the insured’s business operations due to a covered event. Many forms cover cyber terrorism.

• Crime Coverages: May cover extortion demands based on threats to harm the insured’s data or computer system. May also cover funds transfer fraud and/or computer fraud.

• Computer Forensics: Covers the cost for a thorough security audit of your computer systems to identify the source and scope of the data breach.
 
• Notification costs: Covers your cost to fulfill any obligation you have to notify third parties of an actual or suspected breach of personally identifiable
information.
 
• Credit monitoring: This is a necessary service to mitigate potential identity theft claims. Covers the cost to provide credit monitoring and fraud alert services to affected customers.


Third-party Coverages

• Network Security: Covers claims arising out of the insured’s failure to prevent a virus from damaging data or a hacker from gaining access to a computer system.

• Privacy Liability: Covers claims arising from the insured’s failure to protect the privacy of customers and other parties. Some forms cover claims by the insured’s employees as a result of breaches of employee data.

• Website Media Liability: Covers damages against the insured resulting from certain intentional torts like invasion of privacy, public disclosure of private facts, defamation, libel, or slander. Also covers violations of intellectual property rights like infringement of copyright, trademark, trade name, trade dress, title, slogan, service mark or service name. Plagiarism and domain name infringement may also be covered.

In the wake of the Snowden affair, the NSA will undoubtedly reassess its security protocols. Clients should reassess their cyber security practices as well. The odds are if their business hasn’t been hacked yet, it will be. And if it has already been hacked, it will probably be hacked again.

Source: Burns & Wilcox

When it comes to Business Insurance, I get a lot of Austin business owners asking me the difference between Workers Compensation and an Accident Policy.  Either they have an accident policy or they got a Workers Comp quote and it's too expensive.  Here's a brief summary of my take on the difference between the two options.  I encourage you to do further research on your own.

Workers Comp has a maximum weekly payout that might not be enough to cover the employees salary.  The maximum payout is $725 per week (again that is the maximum).  I have seen some accident policies that will cover the employees salary and more.  so, if you're looking for a policy that will fulfill the employees financial needs, maybe the accident policy is the best option. 

Workers Compensation also protects the employer.  So if an employee cuts their hand off and decides to sue the employer, the Workers Comp policy will offer protection to the employer where most accident policies do not offer coverage.  Also, Workers Comp covers all related medical expenses even if an expense occurs years after the accident.  In my opinion, these two factors make it a better option.  

When looking at the overall cost, you simply can't afford not to have one of the two in place.  As for which one, I guess it just depends on your needs.  I'll leave you with this, I remember going to my first CIC Class (continuing education class for insurance professionals) and the veteran instructor said, "When should you recommend an Accident Policy to an insured?", he replied, "Never".  Hopefully the above information has been helpful. 

Here is some additional information on Workers Compensation from the Texas Department of Insurance website that might be helpful:
http://www.tdi.texas.gov



Jason Matison
Business Insurance Agent
Austin, Texas