General liability insurance, whether for commercial or personal purposes, typically does not cover cyber attacks. Here's why:
Commercial General Liability (CGL) Insurance
Commercial General Liability (CGL) insurance is designed to protect businesses against claims of bodily injury, property damage, and personal and advertising injury that occur on their premises or as a result of their business operations. However, CGL policies generally exclude coverage for losses related to cyber incidents. This is because the nature of cyber risks and the type of damage they cause—such as data breaches, ransomware attacks, and other forms of cybercrime—are not typically addressed by the standard provisions of CGL policies.
Why CGL Doesn't Cover Cyber Attacks
1. Exclusion Clauses: Most CGL policies have specific exclusions for electronic data and cyber-related incidents. This means that losses due to cyber attacks are not covered unless explicitly stated otherwise.
2. Nature of Cyber Risks: Cyber risks involve unique exposures such as data breaches, loss of sensitive information, and network security failures, which require specialized coverage that CGL policies do not provide.
Solution: Cyber Liability Insurance
To protect against cyber threats, businesses should consider obtaining Cyber Liability Insurance. This type of policy is specifically designed to cover the various costs associated with cyber attacks, including:
- Data breach notification expenses
- Legal fees
- Costs of data recovery and business interruption
- Cyber extortion payments
- Regulatory fines and penalties
Personal Liability Insurance
Personal liability insurance, which is often included in homeowners or renters insurance policies, provides coverage for claims of bodily injury and property damage that you or members of your household cause to others. Similar to CGL insurance, personal liability insurance does not typically cover losses resulting from cyber attacks.
Why Personal Liability Insurance Doesn't Cover Cyber Attacks
1. Coverage Scope: Personal liability insurance is focused on physical damage and bodily injury, not the intangible losses associated with cyber incidents.
2. Exclusions: Policies generally exclude coverage for losses related to electronic data and cyber incidents, much like commercial policies.
Solution: Personal Cyber Insurance
Individuals concerned about cyber risks should look into Personal Cyber Insurance or add cyber coverage endorsements to their existing homeowners or renters policies. Personal Cyber Insurance can provide protection against:
- Identity theft
- Online fraud
- Cyber extortion
- Data recovery costs
- Legal expenses related to cyber incidents
Neither commercial general liability insurance nor personal liability insurance typically covers losses resulting from cyber attacks. Businesses and individuals need to seek specialized cyber insurance policies to ensure they are protected against the financial impacts of cybercrime. Understanding the limits of your current insurance and considering additional coverage options for cyber risks is essential in today's increasingly digital world.
Camargo Insurance can help with Cyber protection.
