Are Cyberattacks Covered Under My General Liability Insurance Policy?

In the digital age, cyberattacks have become a significant concern for many businesses regardless of their size or industry. As a business owner, you may wonder if your general liability insurance policy can cover losses and expenses if your business experiences a cyberattack.

What Is General Liability Insurance?

General liability insurance, or commercial general liability insurance, is a type of insurance policy that can financially protect businesses from various claims, including bodily injury, property damage, and personal and advertising injury that may arise from your business operations.

These policies are typically designed to cover other parties’ physical losses rather than those arising from cyber incidents.

Cyberattacks, such as data breaches, ransomware attacks or phishing scams, involve digital assets and are generally not considered “bodily injuries” or “property damage” in the context of a traditional general liability insurance policy.

Therefore, it’s likely that this type of coverage may not cover losses related to cyberattacks.

How Can Businesses Cover Cyberattacks?

While general liability insurance may not be the right choice for cyberattack-related coverage, this doesn’t mean businesses are left without options.

Cyber liability insurance, also known as cyber insurance, is a specialized policy designed to help businesses mitigate risk exposure by offsetting costs in the aftermath of a cyberattack.

Cyber liability insurance can cover a range of expenses and losses following a cyber incident, such as data recovery, incident investigation, business interruption, legal costs and fines, and cyber extortion.

These policies are designed to cover the unique risks associated with digital operations and cyber threats, which are typically not covered under a standard general liability insurance policy.

It’s important to note that the coverage provided by cyber liability insurance can vary greatly depending on the insurer and the policy.

Some policies may cover only first-party damages (i.e., those affecting your business directly), while others may also include coverage for third-party damages (i.e., claims made against your business by people or companies affected by the cyberattack).

We’re Here to Help

While your general liability insurance policy may not cover cyberattacks, cyber liability insurance can provide the specialized coverage needed for a cyber-related incident. As cyber threats evolve, a comprehensive coverage portfolio may become essential to business risk management.

Contact the team at the Cormack-Routhier Agency, Inc. today to learn more about insuring your business against cyberattacks and other digital threats.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.