What Is Cyber Liability Insurance & Why Is It Important?

Cybersecurity has become a major concern for businesses of all sizes and industries. With the increasing reliance on technology and digital platforms, cyber attacks have become more frequent and sophisticated. As a result, businesses are vulnerable to data breaches, network intrusions, and other cyber threats that can cause significant financial losses and reputational damage.


One way that businesses can protect themselves from these risks is by purchasing cyber liability insurance. 

What is Cyber Liability Insurance?

Cyber liability insurance is a type of insurance that specifically addresses the risks associated with cyber threats to businesses and organizations. It provides coverage for losses arising from data breaches, cyber-attacks, and other forms of cybercrime. Cyber insurance policies are designed to protect companies against financial losses resulting from these incidents by covering expenses such as legal fees, business interruption costs, and damage to reputation.


The need for cyber liability insurance has become increasingly apparent in recent years as the frequency and severity of cyber-attacks have grown. According to a report by Hiscox Insurance, 61% of small businesses experienced a cyber attack in 2019 alone. These attacks can result in significant financial damages for businesses, including lost revenue, legal fees, and reputational harm. In many cases, the cost of recovering from a cyber attack can be so high that it can put smaller companies out of business entirely.


Cyber insurance works by providing coverage for specific types of losses resulting from cyber incidents. For instance, some policies may cover expenses related to restoring lost data or repairing damaged computer systems. Others may provide coverage for expenses incurred while investigating the cause of an incident or responding to customer inquiries about privacy breach notifications. The specifics of each policy will vary depending on the insurer and the needs of the insured company. 


Cyber liability insurance is an essential tool for businesses looking to protect themselves against financial losses resulting from data breaches and other forms of cybercrime. As technology continues to advance at an unprecedented rate, companies must remain vigilant against emerging threats in order to safeguard their valuable assets and maintain their competitive edge in today's digital landscape. By investing in comprehensive cybersecurity measures such as cyber liability insurance policies, businesses can mitigate risk while remaining focused on their core operations without fear or anxiety over potential data loss or theft incidents occurring unexpectedly affecting future outcomes negatively.


Who Needs Cyber Liability Insurance?

Businesses of all sizes and industries must evaluate their exposure to cyber risks and ensure adequate protection against potential financial losses. Cyber liability insurance has become a crucial component of a comprehensive risk management plan for any business that uses digital technology to store, access, or transfer sensitive information. This insurance provides coverage for costs related to data breaches, network security failures, cyber extortion, and other cyber-attacks.


Small businesses, lacking resources and expertise in managing digital risks, are particularly vulnerable to cyber threats. However, larger companies with valuable data assets are also targeted by sophisticated hackers. Even non-profit organizations collecting personal information online face risks. Therefore, any business relying on computers or electronic devices should consider purchasing cyber liability insurance.


Successful cyber-attacks can have devastating consequences, regardless of a company's size or industry. Costs associated with data system restoration, customer notifications, credit monitoring services, and legal defense fees can quickly escalate into millions of dollars. Additionally, reputational damage resulting from a data breach can harm an organization's brand image and customer trust for years. Adequate coverage under a reputable cyber liability insurance policy helps mitigate these risks and protect businesses from potential financial ruin.


What Does Cyber Liability Insurance Cover?

The coverage provided by a cyber liability policy can vary depending on the specific terms and conditions of the policy. A typical plan covers: 

  1. Data Breaches: Cyber liability insurance can help cover the costs associated with a data breach, such as the cost of notifying customers, providing credit monitoring services, and defending against lawsuits.
  2. Cyber Extortion: This policy can help cover the costs associated with cyber extortion, such as the cost of paying a ransom or negotiating with cybercriminals.
  3. Business Interruption: This insurance can help cover the costs associated with business interruption caused by a cyber attack, such as lost revenue and extra expenses incurred as a result of the attack.
  4. Reputational Damage: Cyber liability insurance can help cover the costs associated with reputational damage caused by a cyber attack, such as the cost of public relations and advertising campaigns to repair the business's reputation.


What is Not Covered by Cyber Insurance?

It is crucial for businesses to carefully review the terms and conditions of their cyber insurance policies to understand what is covered and what is not. They should also collaborate closely with their insurance providers to ensure they have adequate coverage based on their specific risk profile and industry sector. The following are often not covered by cyber insurance:


  1. Acts committed intentionally or with fraudulent intent: Some policies exclude coverage for intentional acts or those carried out with fraudulent intent. This means that if a company willingly engages in illegal activities or intentionally causes a cyber incident, they may not be covered under the policy.
  2. Damage resulting from preventable viruses or malware: Basic security measures like installing antivirus software and updating operating systems are expected preventive measures. Therefore, damage resulting from viruses or malware that could have been prevented through these measures may be excluded from coverage.
  3. Losses arising from insider threats: Cyber insurance policies may not cover losses caused by employees who steal sensitive data or intentionally disrupt systems from within the organization. Insider threats are considered internal risks that may be addressed through other means, such as employee training and internal controls.


Cyber Liability VS. Data Breach Insurance

Understanding the nuances between different insurance policies can help businesses make informed decisions when it comes to managing their cybersecurity risks. Two types of insurance policies that are commonly discussed in the context of cybersecurity are cyber liability insurance and data breach insurance. While these two terms may sound interchangeable, they actually refer to distinct types of coverage.


The main difference between cyber liability and data breach insurance is the scope of coverage. Cyber liability insurance covers a broader range of risks associated with online activities, including not only data breaches but also other forms of cybercrime such as hacking, phishing scams, and malware attacks. This type of policy typically provides coverage for both first-party losses (such as damage to your own computer systems) and third-party losses (such as lawsuits filed by customers or business partners who have been affected by a cyber-attack).


Data breach insurance, on the other hand, focuses specifically on covering the costs associated with a data breach event. This may include expenses related to notifying affected individuals, providing credit monitoring services, hiring forensic investigators to determine the cause of the breach, and defending against potential legal claims resulting from the incident. Data breach insurance does not typically cover losses resulting from cyber attacks that do not involve a data breach.


Ultimately, whether a business should invest in cyber liability or data breach insurance will depend on their individual risk profile and needs. Businesses that engage in high-risk activities such as e-commerce or handle large amounts of sensitive customer information may benefit from broader coverage offered by cyber liability insurance. However, companies that primarily want protection against potential data breaches may find that a more targeted policy such as data breach insurance is sufficient for their needs.


Choosing a Cyber Insurance Policy for Your Business?

Selecting an appropriate policy to safeguard against potential cyber risks is a crucial decision for businesses. The first step in choosing the right cyber insurance policy is to assess your business's specific needs and exposure to cyber risks. This includes evaluating the types of data you store, the number of employees who have access to sensitive information, and any regulatory requirements that apply. 


Once you have a clear understanding of your business's unique cyber risk profile, it's time to compare policies from different insurers. When evaluating policies, it's important to consider not only the scope of coverage but also the terms and conditions of each policy. For instance, some policies may include exclusions or limitations that could leave your business vulnerable in certain situations. Another important factor to consider when selecting a policy is the insurer's reputation for customer service and claims handling. In the event of a cyber incident, prompt and efficient resolution is critical. Look for an insurer with a proven track record of working closely with clients throughout the claims process. Choosing a policy requires careful consideration and evaluation of your business's specific needs and exposures.


By taking these steps and partnering with a reputable insurer, like BIS Benefits, that offers comprehensive coverage and outstanding customer service, you can help protect your business from potentially devastating financial losses resulting from cyber incidents.


Cyber Liability Insurance FAQs

  • What are some common types of cyber attacks that are covered by cyber liability insurance?

    Common types of cyber attacks covered by cyber liability insurance include data breaches, ransomware attacks, and phishing scams. These attacks can result in financial losses, reputational damage, and legal liabilities for businesses, making such insurance an important safeguard against cyber risks.

  • Can cyber liability insurance also cover the cost of legal fees in the event of a cyber attack?

    Yes, cyber liability insurance can cover legal fees in the event of a cyber attack. This coverage is typically included in most policies and can help businesses mitigate the financial impact of lawsuits resulting from data breaches or other cyber incidents.

  • Are there any exclusions or limitations to coverage under a cyber liability insurance policy?

    Exclusions and limitations to coverage under a cyber liability insurance policy may vary depending on the insurer, but common exclusions include intentional acts, criminal activity, and bodily injury. It is important to review policy terms carefully to understand what is covered.

  • How much does cyber liability insurance typically cost for businesses?

    The cost of cyber liability insurance for businesses varies based on the size, annual sales, industry, level of cyber risk and more. Policies can range anywhere from $5,000-$500,000. Speak to a BIS Benefits broker who can help you get the best price for your business needs.

  • Are there any specific industries or businesses that are particularly at risk for cyber attacks and should prioritize getting cyber liability insurance?

    Certain industries such as healthcare, finance, and retail are more susceptible to cyber attacks due to the nature of their business and the type of data they handle. These businesses should prioritize getting cyber liability insurance to protect against potential financial losses.

What Employee Benefits Do Georgia Workers Want in 2025?

by Drew Holley • 17 January 2025
Key Insights on Employee Benefits for Small Businesses in Georgia Employee benefits play a pivotal role in attracting and retaining talent, particularly for small businesses striving to compete with larger corporations. BIS Benefits has partnered with Mployer Advisor to bring you an exclusive 2025 Employee Benefits Benchmarking Report, tailored specifically for businesses in the South Atlantic region with 25–49 employees. This blog highlights key findings from the report and how they can help you craft a competitive benefits strategy. Want to dive deeper? Download the full 2025 Employee Benefits Benchmarking Report to gain actionable insights and trends tailored for businesses like yours. Key Findings from the 2025 Employee Benefits Benchmarking Report 1. Medical Benefits: Affordability and Trends 76% of employers in the South Atlantic region offer medical benefits, with 63% of employees enrolling. On average, small businesses contribute $580 per month for single coverage and $707 for family coverage —in line with regional benchmarks. High-deductible health plans (HDHPs) with health savings accounts (HSAs) are gaining traction as cost-saving options. What this means for your business: Offering at least one affordable plan option with employer contributions around regional averages helps you stay competitive in the labor market. 2. Supplemental Benefits: A Strategic Edge Dental and vision benefits are offered by over 80% of employers in this cohort, with high employee enrollment rates of 98% and 93%, respectively. Life insurance payouts are commonly structured as multiples of earnings, with the majority of plans offering 1–2x salary coverage. Voluntary benefits such as critical illness and accident insurance are being increasingly adopted to attract talent without significant cost increases. Takeaway: Supplemental benefits can enhance your overall offering without breaking your budget. Highlight these options to potential hires to differentiate your package. 3. Retirement and Financial Benefits: Securing the Future 91% of employers offer defined contribution retirement plans (e.g., 401(k)), with 74% of employees participating. Employer matching contributions average between 4%–6% , a vital component in employee retention. Auto-enrollment and auto-escalation features are becoming standard, simplifying the process for employees and increasing participation. Action Step: Ensure your retirement plan includes competitive matching and user-friendly features like auto-enrollment to boost engagement. 4. Leave and Flexibility: Meeting Modern Expectations Consolidated leave programs (combining sick, vacation, and personal days) are offered by 69% of employers , reflecting a trend toward greater flexibility. Remote work options and flexible schedules are growing in popularity, with 40% of businesses offering work-from-home arrangements . How to stand out: Consider adding or expanding remote work policies and flexible scheduling to meet employee expectations in 2025. Why Download the 2025 Employee Benefits Benchmarking Report? This comprehensive report provides: Regional and national comparisons to help you understand how your benefits stack up. Detailed insights into cost-sharing, plan designs, and employee preferences. Actionable data on emerging trends like HDHPs, flexible leave policies, and wellness programs. The report equips Georgia small businesses with the knowledge needed to craft a competitive benefits package that aligns with employee needs and business goals. Download the Report Today Don’t miss out on the opportunity to gain insights that can transform your benefits strategy in 2025. Download the full report here by entering your email address and receive actionable data to help your business attract and retain top talent.

HDHPs: How High Deductible Health Plans Can Save Money for Employers and Employees

by Drew Holley • 6 January 2025
High Deductible Health Plans (HDHPs) are transforming how employers and employees manage healthcare costs. By offering lower premiums and pairing seamlessly with Health Savings Accounts (HSAs) , HDHPs provide a strategic way to save money while maintaining access to quality healthcare. In this article, we’ll explore how HDHPs work, their benefits for employers and employees, and how to maximize their potential. To learn more about the benefits of HDHPs and related options, visit our Group Benefits page . What Are HDHPs? HDHPs are health insurance plans characterized by higher deductibles and lower monthly premiums. These plans encourage smarter healthcare spending, as individuals must pay for medical expenses out-of-pocket until their deductible is met. A significant advantage of HDHPs is their compatibility with HSAs. HSAs allow employees to save pre-tax dollars for qualified medical expenses, reducing taxable income and providing a long-term financial safety net. Unlike Flexible Spending Accounts (FSAs), HSA funds roll over year after year, making them an ideal savings tool. To better understand the differences between HSAs and FSAs, check out our detailed guides on Health Savings Accounts and Flexible Spending Accounts . The Employer Advantage: Cost Savings and Competitive Benefits Employers benefit significantly from HDHPs because they reduce overall premium costs while providing employees with greater flexibility. These plans can be part of a larger strategy to attract and retain top talent, especially when paired with proper education about HSAs. Offering HDHPs demonstrates a commitment to cost-effective, forward-thinking benefits management. Businesses can tailor these plans to align with workforce needs, ensuring employees feel supported while keeping costs under control. For help designing a comprehensive benefits package, visit our Group Benefits page for insights on tailoring solutions for your team. The Employee Advantage: Affordable and Flexible Coverage For employees, the main draw of HDHPs is their affordability. With lower premiums, employees can save on monthly healthcare costs while taking advantage of HSAs to manage out-of-pocket expenses. HSAs offer employees tax savings, flexibility, and long-term benefits, making them an excellent choice for those planning for future healthcare needs. This is especially valuable for individuals and families who don’t anticipate frequent medical expenses but want to ensure coverage for unexpected costs. Learn how to maximize your savings with our guide to Health Savings Accounts , a vital companion to any HDHP. Key Differences: HSAs vs. FSAs While both HSAs and FSAs offer tax advantages, they differ significantly in how funds are managed. HSAs allow for funds to roll over indefinitely and are owned by the employee, even if they change jobs. FSAs, on the other hand, are subject to the "use it or lose it" rule, meaning unspent funds may be forfeited at the end of the year. Employees using FSAs should familiarize themselves with rollover and grace period options to avoid losing money. To better understand how these accounts compare, check out our Flexible Spending Accounts overview . Industry Trends: HDHPs Are Gaining Momentum HDHPs are increasingly popular across various industries, from technology to manufacturing. Businesses see these plans as a way to manage rising healthcare costs while still offering competitive benefits. As employers look for cost-effective solutions, HDHPs stand out as a forward-thinking option that balances affordability with quality. Pairing HDHPs with educational resources ensures employees feel confident in navigating their healthcare choices. Key Takeaways For Employers: HDHPs lower premium costs while providing flexibility for employees. For Employees: When paired with HSAs, HDHPs offer significant tax advantages and long-term savings opportunities. For Everyone: Understanding the differences between HSAs and FSAs is essential for making informed benefits decisions. Whether you’re an employer or employee, HDHPs can be a game-changer for managing healthcare costs. To explore how these plans fit into your benefits strategy, visit our pages on Group Benefits , Health Savings Accounts , and Flexible Spending Accounts . 
Drew Holley and Jessie Couch Discussing HSA and FSA

FSA vs HSA | Which One is Best for your Georgia Employees?

by Drew Holley • 12 December 2024
Use It or Lose It? Demystifying FSAs and HSAs Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are popular options for managing healthcare expenses while enjoying some tax benefits. However, these two accounts differ significantly in how unused funds are handled at the end of the year. This difference can impact your financial planning and overall healthcare strategy. In this article, we'll delve into the "use it or lose it" concept, explore how it applies to FSAs, and compare it with HSAs, highlighting why it's important to understand these rules when making your benefits choices. For more information on HSAs and FSAs, watch the full episode of the BIS Podcast here or below. FSAs and the "Use It or Lose It" Rule FSAs have traditionally been governed by a "use it or lose it" rule. This means that any unspent funds in your account at the end of the year would be forfeited. This requirement made it crucial for employees to accurately estimate their healthcare costs and spend all allocated FSA funds before the year ended. However, since the introduction of the Affordable Care Act (ACA), things have changed. Today, many employers offer more flexibility with FSAs. Thanks to the ACA, employers may now allow employees to carry over a limited amount of unspent funds from one year to the next—originally $500, now adjusted for inflation to about $650. Alternatively, some employers may offer a grace period of up to two and a half months after the end of the plan year to use any remaining funds. It’s important to know what rules apply to your FSA so that you don’t leave any money on the table. To learn more about maximizing your benefits options, check out our guide on employee benefits strategy . HSAs: A Different Story Unlike FSAs, HSAs do not follow the "use it or lose it" rule. Funds contributed to an HSA remain in the account year after year, regardless of whether or not you use them. This is one of the key benefits of an HSA—you can build up savings over time to cover future medical expenses. Plus, the funds in an HSA are portable, meaning you take them with you if you change jobs or retire. This makes HSAs a valuable tool for long-term healthcare planning. If you're considering switching to a High Deductible Health Plan (HDHP) to become eligible for an HSA, it’s important to weigh the pros and cons. For more information about HDHPs and their compatibility with HSAs, check out our Health Savings Account service page . Making the Most of FSAs and HSAs Whether you choose an FSA or an HSA, it’s important to understand how to make the most of these accounts. For FSAs, knowing your employer's specific rules about rollover and grace periods can help you avoid losing funds. For HSAs, the focus should be on maximizing contributions, as the funds will continue to grow tax-free, providing a cushion for future medical needs. Both FSAs and HSAs can be used for a wide range of eligible expenses, including medical, dental, and vision care. If you want a comprehensive overview of your coverage options, our group health insurance page is a great resource. Additionally, if you work in a specialized industry like construction or technology, it's beneficial to explore options that are tailored to your needs. Industries like construction and technology have unique challenges that may impact the type of coverage you choose, including how you use tax-advantaged accounts like FSAs and HSAs. Key Takeaways About FSAs, HSAs, and the "Use It Or Lose It" Rule: FSAs : Historically governed by a "use it or lose it" rule, thanks to the ACA, employers may now allow employees to carry over a limited amount of unspent funds from one year to the next—originally $500, now adjusted for inflation to about $650. Be sure to understand your employer's policies. HSAs : Funds roll over year after year and are portable. HSAs offer significant long-term savings opportunities, particularly for those on HDHPs. Plan Carefully : Knowing how these accounts work can save you money and help you better prepare for healthcare costs now and in the future. To get more insights into how you can make the most of your employee benefits, visit our resources page and discover helpful tools to make informed decisions for yourself and your family.
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