Out of all the risks you face in your construction business, your vulnerability to a cyber attack probably isn’t at the top of your list. After all, you’re not likely selling products and services over the Internet like a retail store, so why would you think about including cyber liability insurance in your New York construction insurance coverage?
Because there’s a lot more to “cyber liability” than meets the eye.
If you run a business and have employees and customers, you have a lot of confidential information on file. Any breach of confidential company, employee, or customer information can quickly snowball into a mountain of liability. In fact, experts believe cyberrisk is one of the most dangerous risks for 2013.
Here are some common exposures:
- Information security and privacy liability for failing to protect personal or company information held on computers, laptops, smartphones, paper files, or systems of third-party vendors
- Costs to comply with the law and notify individuals that confidential information has been breached
- Investigative and public relations costs
- Loss of business income and liability for customers’ business interruption due to hackers preventing your customers from gaining access to your website
- Loss of business income due to hackers interrupting your service provider’s systems
- Libel or other personal injury resulting from postings on your website or social media venues
As you can see, “cyber liability” covers a lot more than merely those exposures tied to businesses that sell products or services over the Internet. And with identity theft and other cyber crimes continuing to rise, these are threats you can’t afford to ignore because they can cost you plenty.
Will your General Liability or other traditional insurance policy cover these exposures?
The fact is, the world has changed dramatically since traditional insurance policies were designed. If your commercial policy has any of this type of coverage at all, it’s either strictly limited or purely accidental. Even if you have an endorsement that covers a specific aspect of your cyber risks, you’re not nearly as protected as you would be with a separate policy.
If you suffer a data breach, here are some typical reasons you could find yourself without coverage:
- Your traditional insurance policies don’t cover the expense of notifying individuals that their confidential information was breached.
- Your GL policy won’t respond to claims for damage to intangible property.
- Your property policy only provides loss of business income coverage if there is direct physical damage to your property (not damage caused by hackers or a disgruntled employee who shuts down your website, your computer systems, or your service provider’s systems).
- Your crime policy won’t respond to claims for damage to intangible property, and might exclude the loss of certain confidential information.
- Your GL policy likely excludes any claims arising out of blogs you own or host.
What should you do to protect yourself?
The first thing you should do is discuss your risks with your New York construction insurance provider. Since there’s not a lot of consistency among cyber liability policies and they can cover a wide array of exposures, you’ll need to identify your specific risks and tailor the insurance coverage to fit your needs.
Cyber threats are a reality of doing business in this day and age, even in the construction business. Don’t be caught off guard. Contact the New York construction insurance experts at BNC Insurance and Risk Advisors for an insurance program designed to keep you covered, even from threats you can’t see.
For other great New York business insurance information, download our free report "Ten Unexpected New York Business Exposures That Can Obliterate Your Profits in The Blink of an Eye" and find out what business exposures you need to avoid.