Cyber Liability in the News and the Wall Street Journal have both released stories this week on cyber liability insurance.’s article highlights 6 reasons why a firm should carry the insurance.  The WSJ article carries the ominous title “Most Small Businesses Don’t Recover From Cyber Crime” and  explains that half of small businesses go bankrupt after a network security breach.

The dangers of a cyber attack are varied and include loss of confidential client information, loss of company trade secrets, business interruption while servers are inoperative, lost revenue from failed client transactions or lost clients altogether.  The risk is growing as more and more business is transacted online and via computers and many companies are looking into the insurance – if not already purchasing.

When buying cyber liability insurance, it is important to note that not all coverage is created equal.  This area is growing and developing each month.  No policy form is the same, so it is important to have knowledge of some items that you may want to consider when purchasing:

•  Do you have need for first party coverage, third party coverage or both?
•  How does the cyber policy coordinates with your existing general liability and errors & omissions insurance?
•  Since each form is different, it is important to check each option’s exclusions and exact coverage wording.
•  Insurance you already purchase may include a limited amount of cyber coverage automatically.  Know whether this is adequate for your company or if more should be purchased.
•  Know what ancillary coverage a policy has. This can include – breach prevention services, risk management, and legal services when a breach occurs.
•  Note the sublimits of coverages – notification costs, forensic costs, credit monitoring costs
•  Be aware of whether the options cover business interruption expenses.

Purchasing Cyber Liability is multi-faceted.  Contact us to discuss whether this policy may be right for your accounting firm.