Do You Need Cyber Liability Insurance?

Author: Jon Isenberg 2-minute read

Computer Forensic, Cybersecurity and Managed IT Solutions.

What is it?
Cyber-insurance is a relatively new insurance product and is used to protect law firms and businesses from Internet-based risks. Most policies cover a business’ liability for a data breach in which the firm’s data and information is exposed or stolen.

Cyber Insurance

Does my firm or business need it?
With more and more law firms and businesses having cyber-attacks, business owners need to consider adding a Cyber Liability Insurance policy to their insurance package. Cyber Liability Insurance is designed to cover the financial losses that result from data breaches and other cyber events. Many policies include both first-party and third-party coverages. First-party applies to losses sustained by your company directly and third-party coverages applies to claims against your firm by people who have been injured a result of your actions or failure to act.

Size does not matter.
In 2018, over 45% of phishing attacks were launched against businesses with less than 250 employees. Moreover, The U.S. Security and Exchange Commission estimates that half of the small businesses that suffer a cyber-attack go out of business within six months. Thus, Cyber Liability coverage is not just for large firms and companies. The issue is whether you have data that can be exposed and not how big your organization is.

What is Covered?
Cyber Liability Insurance policies often have limits and deductibles and not all policies cover the same things. Special care needs to be used when selecting the right policy. Items of coverage to look for include:

  1. Investigations – a Digital Forensics Investigation is necessary to determine what occurred, how to repair the damage, and how to stop the breach from reoccurring in the future.
  2. Business Losses – monetary losses experienced by network downtime, business interruption, data loss recovery and costs involved in managing a crisis (may include repairing damage to your reputation)
  3. Privacy & Notification – this includes data breach notifications to customers and other affected parties.
  4. Lawsuits & Extortion – legal expenses associated with the release of confidential information and Intellectual property, legal settlements and regulatory fines. May also include the costs of cyber extortion (ransomware).

Cyber Liability Insurance is a Claims Made policy. This means that the claim for coverage must be presented to the insurance company in the policy period. If the claim is made outside of the policy dates, there is no coverage. This is different from a General Liability policy that is an occurrence policy (claim must occur during the policy period). So, as an example, if the Cyber policy has coverage dates of 5/1/2019 to 4/30/2020 and the claim occurs on 4/1/2020 but is not brought to the insurance company’s attention until 5/5/2020, there is NO COVERAGE.

For more information on how Digital Forensics and Cybersecurity fits within your Cyber Liability Insurance policy, reach out to Elijah.


Founded in 2003, ELIJAH is a multi-award-winning leader in providing expert digital forensic, data security solutions, and managed IT. ELIJAH is owned and managed by former litigation partners and is an efficient boutique digital forensic, cybersecurity and IT solutions provider that makes clients’ lives easier through effective communication and white glove service. For additional information, please visit or call 866-354-5240.

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