Small businesses, by and large, have embraced the internet, with around 71 percent of them running a website. A lot of those websites also include an e-commerce element.

Of course, running a website with e-commerce options almost always means that you’re also running some kind of in-house IT infrastructure and collecting customer data. That’s a tricky business, particularly with a global shortage of cybersecurity professionals.

Without proper security in place, you can face serious cyber liability. Not sure what cyber liability is or how to protect yourself? Keep reading for a cyber liability guide. 

What Is Cyber Liability?

There is no single, federal law that offers protection for personal data, but that doesn’t mean you can’t still run afoul of data protection laws.

For example, healthcare organizations much adhere to HIPAA and HITECH regulations. Financial organizations must follow rules set out in the Financial Modernization Act. COPPA imposes data privacy rules on websites that gather information from kids under 13.

The FTC also has broad authority to punish businesses that fail to adhere to the businesses’ own data protection promises. They often treat it as a case of fraud. Beyond that, a number of states do maintain comprehensive data protection laws.

Any breach of these laws or even your own published data protection policy can open you to liability in the event of data breaches, hacking, or even employee sabotage.

Cyber Liability Insurance

The best defense against cyber liability is strong cybersecurity around your customers’ data. If you already have that in place but still worry about cyber liability, the next step is insurance.

In broad terms, cyber liability insurance help protect your business in the event that you face a data breach. In practice, there are two general categories of cyber liability insurance that we’ll cover in the next section.

Types of Cyber Liability Insurance

You can think of first-party coverage helps you deal with the in-house costs that occur when you face a breach or hack. It commonly covers things like:

  • Informing customers
  • Offering credit monitoring
  • Hiring a public relations firm
  • Forensic investigation
  • Legal fees

Third-party coverage helps protect businesses that work with another company’s customer data and face a breach. it specifically helps cover costs in the event of a lawsuit.

Some insurance companies offer these as two separate policies. Other companies bundle them together into one policy that covers you on all fronts.

Cyber Liability and You

These days, it’s almost more difficult for small businesses to avoid collecting customer data. There are simply too many processes that depend on customers giving you information. That info can range from names and email addresses to physical addresses and credit card numbers.

Once you have that data, though, you must make a serious effort to protect it or you can come up on the wrong side of cyber liability.

RPB Insurance offers a range of business insurance options, including cyber liability insurance policies. If you believe your business needs cyber liability protection, please contact RPB insurance today.