Cyber Liability & Data Breach Insurance
Protect your business from data breaches, ransomware attacks, and the costly aftermath of cyber incidents.
Protect Your Business from Cyber Threats
Get a customized cyber liability quote tailored to your business risk profile.
Why Every Business Needs Cyber Coverage
Cyber attacks don't discriminate by business size. According to IBM's 2024 Cost of a Data Breach Report, the average data breach costs $4.88 million. For small businesses, even a fraction of that amount can be devastating. New York's SHIELD Act requires businesses to implement data security measures and notify affected residents of breaches—adding legal exposure to cyber risk.
What Is Cyber Liability Insurance?
Cyber liability insurance protects businesses against the financial consequences of data breaches, cyber attacks, and technology failures. Unlike traditional property insurance (which covers physical assets), cyber insurance addresses the unique risks of our digital world—from ransomware attacks to data theft to network outages.
Coverage typically includes both first-party expenses (your direct costs to respond to an incident) and third-party liability (claims made against you by affected customers, partners, or regulators).
Most policies operate on a "claims-made" basis and include access to 24/7 breach response teams—cybersecurity experts, forensic investigators, and legal counsel who specialize in incident response.
Common Cyber Threats
- •Ransomware attacks
- •Phishing and social engineering
- •Data breaches (customer/employee data)
- •Business email compromise
- •Denial of service attacks
- •Malware and viruses
- •Insider threats
Understanding Cyber Coverage Types
Cyber insurance provides two main types of coverage, each addressing different aspects of a cyber incident:
First-Party Coverage (Your Costs)
Covers your direct expenses from a cyber incident:
- Breach Response Costs
Forensic investigation, legal counsel, public relations, and breach notification expenses.
- Credit Monitoring & ID Protection
Services for affected individuals as required by breach notification laws.
- Ransomware Payments
Ransom payments (where legal) and negotiation services.
- Data Recovery
Costs to restore, recreate, or recover lost or corrupted data.
- Business Interruption
Lost income and extra expenses while systems are down due to a cyber attack.
Third-Party Coverage (Liability)
Covers claims made against you by others:
- Privacy Liability
Claims from individuals whose personal data was compromised in a breach.
- Network Security Liability
Claims from third parties harmed by malware transmitted from your network.
- Regulatory Defense & Fines
Legal defense and penalties from regulatory investigations (where insurable).
- Media Liability
Claims arising from website content, including copyright and defamation.
- PCI-DSS Fines & Assessments
Fines and assessments from payment card industry for data security failures.
What Cyber Insurance Covers—and Doesn't
Typically Covered
- Ransomware Attacks
Ransom payments, negotiation, forensics, and system restoration.
- Data Breach Response
Notification, credit monitoring, call centers, and PR expenses.
- Business Interruption
Lost income during system downtime from covered cyber events.
- Cyber Extortion
Threats to release data or attack systems unless payment is made.
- Regulatory Proceedings
Defense costs and fines from data protection enforcement actions.
- Forensic Investigation
Expert analysis to determine breach scope and secure systems.
Common Exclusions
- Prior Known Incidents
Breaches discovered before policy inception or known to the insured.
- Failure to Maintain Security
Claims may be denied if you failed to meet security requirements in the policy.
- Social Engineering (may require endorsement)
Fraudulent fund transfers from phishing often need separate coverage.
- Bodily Injury/Property Damage
Physical injuries or tangible property damage from cyber events.
- War & Nation-State Attacks
Attacks attributed to nation-states may have limited or no coverage.
- Infrastructure Failures
Power grid failures or internet outages outside your network.
Don't Wait for a Breach to Get Protected
Cyber attacks are not a matter of "if" but "when." Get the coverage you need before an incident occurs.
Who Needs Cyber Liability Coverage?
Any business that uses computers, collects customer data, or relies on technology needs cyber insurance. However, certain businesses face higher risk:
High-Risk Industries
- •Healthcare - Patient records, HIPAA exposure
- •Financial Services - Account data, regulatory scrutiny
- •Retail/E-commerce - Payment card data, PCI-DSS
- •Professional Services - Client confidential data
- •Manufacturing - Operational technology, trade secrets
- •Education - Student records, research data
High-Risk Data Types
- •Social Security numbers
- •Credit card and financial information
- •Protected health information (PHI)
- •Driver's license numbers
- •Biometric data
- •Login credentials and passwords
Small Business Reality: Many business owners believe they're "too small to be a target." In reality, cybercriminals actively target small businesses because they often have valuable data but weaker security than large enterprises. According to industry data, a significant percentage of small businesses close within months of a major cyber attack.
Understanding Cyber Insurance Costs
Cyber insurance premiums vary widely based on your risk profile. Here's what affects your cost:
Typical Premium Ranges
| Business Profile | Annual Premium Range |
|---|---|
| Low-risk small business (under $1M revenue) | $500 - $2,000 |
| Mid-size business ($1M - $10M revenue) | $2,000 - $10,000 |
| Healthcare practice | $3,000 - $15,000 |
| E-commerce business | $2,500 - $12,000 |
| Financial services firm | $5,000 - $25,000+ |
*Ranges are estimates. Actual premiums depend on security posture, data types, industry, and coverage limits. Contact us for an accurate quote.
Factors That Increase Premiums
- ↑Prior cyber incidents or breaches
- ↑High volume of sensitive data (PII, PHI, payment cards)
- ↑Lack of multi-factor authentication (MFA)
- ↑No employee security training
- ↑Outdated or unpatched systems
- ↑No backup or disaster recovery plan
Factors That Reduce Premiums
- ↓Multi-factor authentication on all accounts
- ↓Regular employee security awareness training
- ↓Endpoint detection and response (EDR) solutions
- ↓Regular backups with offline/offsite copies
- ↓Incident response plan in place
- ↓Regular security assessments or penetration testing
What Happens When You Have a Breach
With cyber insurance, you're never alone during an incident. Here's how the breach response process works:
Contact the Breach Hotline Immediately
Most cyber policies include a 24/7 breach response hotline. Call as soon as you suspect an incident—don't wait to confirm. Early intervention reduces damage.
Breach Coach Assigned
A specialized attorney (breach coach) takes over coordination, ensuring communications are privileged and managing the response team.
Forensic Investigation
Cybersecurity experts analyze the breach: how it happened, what was accessed, and how to secure systems. This evidence is crucial for legal compliance.
Notification & Remediation
Required notifications are sent to affected individuals and regulators. Credit monitoring is arranged. PR specialists manage public messaging.
Recovery & Improvement
Systems are restored, security improvements implemented, and lessons learned are documented. Many policies cover post-incident security enhancements.
New York SHIELD Act Requirements
New York's Stop Hacks and Improve Electronic Data Security (SHIELD) Act imposes specific requirements on businesses handling NY residents' data:
Data Security Requirements
- •Reasonable administrative safeguards
- •Technical safeguards (access controls, monitoring)
- •Physical safeguards for data storage
- •Employee security training
- •Vendor/service provider oversight
Breach Notification Requirements
- •Notify affected NY residents promptly
- •Notify NY Attorney General if 500+ residents affected
- •Expanded definition of "private information"
- •Notification for unauthorized access (not just acquisition)
Compliance Tip: Cyber insurance policies often include access to compliance resources and can help demonstrate "reasonable" security practices as required by the SHIELD Act. Our carriers can provide security assessment tools and best practice guides.
Frequently Asked Questions About Cyber Insurance
What does cyber liability insurance cover?
Cyber liability insurance covers costs related to data breaches and cyber attacks, including breach notification, credit monitoring for affected individuals, forensic investigation, public relations, legal defense, regulatory fines, ransomware payments (where legal), business interruption from cyber events, and liability claims from affected third parties.
How much does cyber insurance cost for small businesses?
Cyber insurance premiums for small businesses typically range from $500 to $5,000+ annually, depending on factors like industry, revenue, data types stored, security measures in place, and coverage limits. Businesses handling sensitive data (healthcare, financial services) generally pay higher premiums.
Do small businesses need cyber insurance?
Yes. Small businesses are increasingly targeted by cybercriminals because they often have weaker security than large enterprises. According to the Verizon Data Breach Investigations Report, 43% of cyber attacks target small businesses, and the average cost of a data breach for small businesses can exceed $100,000—enough to put many out of business.
Does cyber insurance cover ransomware attacks?
Most cyber insurance policies cover ransomware attacks, including ransom payments (where legally permitted), forensic investigation, data recovery, business interruption during the attack, and post-incident security improvements. However, coverage may be limited if security requirements outlined in the policy were not followed.
What is not covered by cyber insurance?
Common exclusions include prior known breaches, intentional acts by the insured, failure to maintain security standards specified in the policy, social engineering fraud (may require separate endorsement), war and terrorism (may have sub-limits), and infrastructure failures outside the insured's network.
Does general liability cover cyber attacks?
No. General liability insurance typically excludes cyber-related claims. While some general liability policies have limited electronic data coverage, they do not cover breach notification costs, ransomware, or the full range of cyber incident expenses. Dedicated cyber liability coverage is necessary for comprehensive protection.
Related Business Coverage
Cyber insurance works best as part of a comprehensive risk management program. Consider these related coverages:
Professional Liability (E&O)
Covers claims arising from professional services and advice.
Commercial Crime
Covers theft, fraud, and social engineering beyond cyber.
Business Interruption
Covers lost income from physical events (non-cyber).
Directors & Officers
Protects leadership from claims after a major breach.
Important Information
This information is provided for educational purposes only and does not constitute legal, security, or insurance advice. Cyber threats evolve rapidly and coverage needs vary by business. Coverage features, exclusions, and availability may vary by state and insurance carrier.
All coverage is subject to policy terms, conditions, and exclusions. Please review your policy carefully and consult with a licensed insurance professional to determine appropriate coverage for your specific situation.
The Steele Agency is licensed to conduct business in New York State. License information available upon request or at the New York Department of Financial Services website.
Protect Your Business from Cyber Threats
Don't let a cyber attack threaten your business. Get the comprehensive cyber liability protection you need with expert guidance from Steele Agency.
Our Cyber Insurance Services Include:
- ✓ Policy comparison from multiple specialized cyber carriers
- ✓ Coverage tailored to your industry and data exposure
- ✓ 24/7 breach response hotline access
- ✓ Security best practice resources and training
- ✓ Annual policy reviews as threats evolve
Serving New York businesses since 1969 • Free quotes • Expert guidance
