If you’re running an online store, do you need cyber liability insurance? The answer is probably, “yes.” Even if you outsource part of the ordering process, you could still be at risk of a cyber liability claim.
What’s Cyber Liability Insurance?
Cyber liability insurance is a special type of business insurance that covers you against losses from cyber breaches.
If identity thieves manage to steal your customers’ information you collected, the customers could try to bring a claim saying you didn’t protect their data as you should have. You could potentially be liable for the following data breach consequences:
- Money stolen from their bank accounts.
- Costs they incur dealing with identity theft.
- A forensic investigation to determine how the breach happened and what was stolen.
- Ongoing identity theft protection for those affected.
- Any other related costs.
Keep in mind that even if someone else may be more at fault, such as the thieves themselves, it may be easier for the customers to try to file a claim against you instead of tracking down identity thieves who may be in another country.
Even if their cyber liability claim wouldn’t hold up in court, it could have enough merit that you’d need to pay legal fees to defend yourself.
How is an Online Store a Source of Identity Theft?
In order to complete each transaction, you need to collect names, addresses, and payment details. In some cases, identity thieves might try to steal and use credit cards or bank account numbers used to pay you and make charges to those accounts.
In other cases, they might combine the information with information they got elsewhere to open credit cards and bank accounts in your customers’ names. You are responsible for taking reasonable steps to prevent this by safeguarding customer information.
What if You Outsource Your Payment Processing?
Even if you outsource your payment processing and don’t collect sensitive information yourself, you may still have liability. It may turn out that a breach was due to a security flaw on your website and not the fault of the payment processor.
In other cases, your company may be brought into the resulting lawsuits along with the payment processor. You’d then need to hire a lawyer to show you had no fault and to recover any expenses you incurred from the payment process.
Get Cyber Liability Insurance Now
The best way to protect yourself against cyber breaches is to purchase cyber liability insurance. This coverage usually includes protection against any claims filed by your customers as well as any losses your business suffered due to the breach. Contact us now for a quote.