Data Breach Insurance
What is Data Breach Insurance?
Data breach insurance offers coverages for losses related to a data breach, hack, or theft of company documents. This helps you respond to a breach if personally identifiable information or personal health information is lost or stolen, whether it’s from a hacker breaking into your network, or an employee accidentally losing their company laptop.
What are the Different Types of Data Breaches Covered?
The three common data breaches are physical, electronic and skimming.
A physical breach involves the physical theft of documents or equipment which contains personal information. Items at risk include:
- Laptops, tablets and CPUs
- External hard drives
- Company phones
- Any other physical assets containing confidential or personal information
An electronic breach involves unauthorized access or a deliberate attack on your systems or network.
Skimming involves the theft of payment/credit card information through capturing and recording the magnetic stripe data. If a dishonest employee uses a device to store or collect credit/debit card data, this will also fall under the skimming category.
How Does Data Breach Insurance Work?
Data breach insurance covers expenses that your business incurs when addressing a breach of data on your business’s system or network. Examples of this coverage include:
- Notification – When there is a data breach, many states have requirements on how quickly businesses should notify their affected customers. Data breach insurance can help pay for some or all of the cost of properly notifying customers of the breach and explaining what information was stolen. Some policies can also cover the costs of providing affected customers with anti-fraud services.
- Investigation – If needed, your policy can cover the cost of hiring a third-party company to investigate the breach.
- Income loss – If you need to temporarily close your business due to a data breach, some policies offer additional coverage to replace lost income.