Businesses own data and digital assets that are very crucial and confidential for them. Due to the rise in data breach and hack in digital assets events, firms want to take steps now to ensure the safety of their assets and data. Thus, insurance agents must be able to come up with solutions for their clients as well as their leads.   

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Many clients believe that having an errors and omissions insurance will safeguard them from the attacks happening on internet-connected devices. But this is not the truth. Cyber liability insurance is a standalone policy. Thus, insurance agents have to understand the critical differences between these two policies. Only then will they be able to explain it to their clients. This will also help them inform their clients about the need for a separate cyber insurance for the safety of their organization.   

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Cyber liability insurance policies provide coverage for significant costs that an insured suffers due to a cyber-attack. It usually includes costs such as investigation costs, government fines, credit card company penalties, notification costs, repairing IT equipment, data restoration, and more similar costs.   

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Some cyber liability insurance policies also provide other kinds of coverage, such as media liability and privacy. Media liability includes costs resulting from intellectual property, trademarks, and copyrights violations. This is basically a first-party coverage.  

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On the other hand, errors and omissions insurance policies protect firms from other costs. It provides coverage for costs associated with legal allegations of negligence, preventable mistakes, incompetent work, and other professional errors. In other words, errors & omissions insurance only provides coverage for the legal costs associated with a lawsuit, including attorney’s fees, court judgments or settlements. This is considered as a third-party coverage.    

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The information provided here helps us to understand that errors and omissions insurance will not provide proper coverage in case of a cyber-attack or data breach event. So, firms require cyber liability insurance to deal with the costs resulting from such an event. It is the responsibility of insurance agents to provide their clients with the correct information and solutions for their client’s needs.