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The New Threat In Town

Monday, February 25, 2013  
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As technology becomes more important to your business, so does your need for protection from cyber liability

By Kathi Adkins

In the insurance world "cyber liability” (also called "technology errors and omissions”) is an exposure to a company or professional that can cause financial loss, whereas general liability is an exposure to physical loss. Cyber liability insurance covers the cost of theft, destruction, or unauthorized use of electronic data through computer viruses and network intrusions.

While many of us continue to dutifully pay for traditional E & O insurance, we should also consider the role that Internet has become in our lives and businesses and the resulting potential for cyber liability. If your current E & O insurance will not cover cyber liabilities, it may be prudent to add technology E & O insurance.

Potential Loss Exposure

Any company that conducts e-business needs protection from an invading army of cyber exposures such as e-theft, breach of private information, and digital assets. And if you have a website, guess what, you are in the media publishing business and need media publishing liability as well!

Here are a few examples of cyber liability claim scenarios:

  • An agent’s laptop or USB drive is stolen with private customer information.
  • A hacker breaks into your servers or cloud and steals clients personal information.
  • A part-time employee gains unauthorized access to (and shares) private client or company information.
  • One of your employees downloads a virus and that virus is sent to a client whose network then crashes as a result of the virus.
  • Someone alleges defamation arise a result of an e-mail, website content, or blog/forum posting.
  • Someone makes a claim of copyright and trademark infringement on your blog or website.
  • You send an unauthorized picture or file via your cell phone and it goes viral.

It may be well worth your time to take a moment and call your claims company, and think about upgrading your policy to include technology E & O!   


Kathi Adkins, The Realty Factor, Inc., is a member of the ORRA Risk Management Subcommittee. She can be reached atkathi@msn.com.


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