What Is Not Covered by Cyber Liability Insurance?

In the digital era, cyber liability insurance has emerged as an essential component of many businesses’ risk management and loss control measures. However, while these policies can help account for many cyber incidents and online threats, they still have certain limitations. Understanding what might not be covered by your insurance should be considered essential knowledge, as you’ll want to plan around these gaps and exclusions.

5 Common Situations Where Coverage May Not Apply

Consider the following types of incidents and how, despite maintaining robust cyber liability insurance, you may not be able to rely on your coverage:

1. Intentional acts—If a cyber incident or data breach is intentionally committed, such as by disgruntled employees, your company may need to handle resulting losses on its own. Commercial crime insurance or fidelity insurance may be able to address some of these concerns.

2. Incidents occurring in the past—Even if the financial repercussions of a data breach continue to mount, your cyber liability insurance likely won’t cover losses and costs if the incident occurred before your policy was active.

3. Breaches stemming from known issues—If a cyber criminal is able to successfully compromise your data or systems through a pre-existing or known vulnerability that you failed to address, your insurer may deny your claim.

4. Incidents with long-term reputational consequences—Although cyber liability insurance may reimburse you for short-term losses, such as revenue you would have earned during a system or network shutdown, policies typically won’t compensate you for long-term losses, such as if reputational harm damages your company’s market value.

5. Issues involving unapproved software—Your insurance company may deny your claim if you or your employees are found to have been using unapproved or unlicensed software.

We’re Here to Help

At Global Insurance and Tax Services, we can help businesses in West Palm Beach, FL understand cyber liability insurance, including its capabilities and limitations. Contact our team today to discuss your options and secure the right policy.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.