With our world being more online than ever the threat of a data breach is high and could be devastating for your business. Don’t be caught on your back foot, get data breach insurance to ensure a better outcome for you and your customers.

What is Data Breach Insurance?

It helps you respond to a breach if protected health information (PHI) or personally identifiable information (PII) was stolen or lost via a hacker breaking into your network or an employee leaving their laptop open at a cafe. 

If your business is the victim of a data breach the insurance can help pay to:

• Notify affected customers, patients, or employees.
• Hire a public relations firm.
• Offer credit monitoring services to data breach victims.

Who Needs Data Breach Insurance?

It’s beneficial for any business that relies on technology to do business with its customers. That could mean a small candle shop that sells online or a large multi-state hospital system. If you’re a California organization that does any of the following, it would be beneficial for you to obtain data breach insurance. 

• Communicates with clients through email, social media, or text messaging.
• Sends or receives electronic documents.
• Uses forms of electronic media for advertising purposes (ex. social media channels or a website).
• Uses a computer network to store pertinent data—accounting records, sales projections, or tax documents.
• Sells goods via a website.
• Stores information that belongs to clients or employees on a computer network—names, addresses, credit card numbers, medical records, dates of birth, social security numbers, or personal identification numbers.

Types of Data Breach Policies in California

From an insurance perspective, there are two types of data breaches: ones that affect businesses and ones that affect the business’ clients. Due to this, there are two types of coverage:

• First Party California Data Breach Insurance: This helps pay for the losses a business faces during an attack. 

• Third-Party California Data Breach Insurance: This assists with the costs that arise during any lawsuits that might occur after a data breach full of compromised data of a business’ clients.

What Data Breach Insurance Does Not Cover

All insurance policies have exclusions and you’ll have to read your policy to understand its specifics. However here are a few common data breach insurance exclusions: 

• Breaches of protected information filed on paper.
• Claims brought by the government or regulators.
• Negligence. This implies the failure to install software updates or security patches.
• Unencrypted data.
• Vicarious liability. This is where data entrusted to a third-party vendor is subsequently breached.

Do You Need Data Breach Insurance Claim Lawyers?

If you suspect your insurance company has wrongfully denied your data breach insurance claim, it may be in your best interest to contact a lawyer who can investigate your claim for unlawful mishandling and breach of contract.

Our team at Lari-Joni & Bassell, LLP works tirelessly on behalf of every one of our clients. We don’t quit until you feel satisfied with the claim amount and feel heard by the insurance company.