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  • Writer's pictureAmanda Bird

Debunking 4 Cyber Insurance Coverage Misconceptions

One of the most challenging issues facing companies today is cybersecurity. But many companies don't realise it affects them too—they're just small. Many hackers assume that since they're smaller, they're easier targets.

1. You Have a Hold Harmless or Other Indemnification from the Service Provider, So You Don't Have Exposure

Even if that's an iron-clad agreement, there will likely still be legal fees and costs incurred until the indemnification kicks in. For example, insureds who fail to respond promptly and get out in front of the matter by using PR to control the damage could pay more overall.

Many general liability policies cover crisis response and guidance services and defence costs. Network Security and Privacy Liability insurance provides these services and more. General liability policies typically cover them to a certain degree, but not typically to the extent needed.

2. Cyber Coverage Is Only for Technology Associated with a Business

The broader scope of cyber insurance coverage is for network and privacy liability, including those insureds who keep records in hard copy that contain personal, identifiable information. This is a common oversight of potential buyers who presume that if they don't have a website or use a hosted service, they don't have exposure – that's just not true.

Records in paper form are still covered, such as employment applications, personnel and customer files, and credit card receipts (with carbons) kept in case computer systems go down.

So, it's not just the laptop that goes missing or the hack that can be covered with the right attorneys, but what about that storage unit full of old company files long forgotten? Someone could buy it, potentially revealing secret information. The policy could cover defence costs, damages, and other issues related to this loss.

3. Your General Liability Policy Will Protect Your Business

Commercial General Liability insurance (CGL) protects your business assets from bodily injury and property damage claims related to claims of negligence made by a third party or in commercial property situations, a tenant or guest.

The industry standard coverages for CGL cover legal costs, investigation costs, court costs, and related defence costs. They exclude any financial loss from the incident, including lost rent or revenue.

Think about it this way: if you want the right tool to do the job, you need to go with a niche liability insurance policy that will keep you protected without fail. A mainstream commercial general liability policy will offer a grainy form of coverage, but it will not be as thorough as what you need. A CGL policy would provide only a mosquito net in flood. Instead, get all-encompassing protection with a dedicated policy.

4. Your Company Is Too Small to Be Hacked

Small businesses comprise 80 percent of all companies in the United States. More than 60 percent of small businesses that have been hacked go out of business within six months. Small businesses are especially vulnerable to cyber-attacks. They are targeted through phishing scams and other hacks, which lock their files and require a ransom to unlock them.


In addition to CGL and Professional Liability policies, cyber policies can be tailored to the specific needs of an insured business by adding, or not adding, a host of standard embedded policies. Many insureds see these as add-ons or extra, but these standard policies allow for a more comprehensive plan.

New Wave Insurance is an Australian insurance specialist, helping clients find the right insurance for their assets, business and indemnity. We've helped thousands of individuals and small businesses find the right insurance whatever their circumstances. If your company has a website or electronic records, you’re vulnerable to cyber attacks, potentially costing your business money and putting customers’ personal information at risk. It’s time to protect your business and your customers with cyber protection insurance. Book a free 15-minute insurance consult to know more about your options.

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