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Business Insurance Does NOT Cover Cyber Losses

For business owners, here’s an extremely important detail to understand about your standard commercial lines policy. Most business owners have a business owner’s policy (BOP) or also known as a commercial package policy (CPP). In any event, your commercial insurance policy has several exclusions from coverage which is important to know for cyber events.

Most policies don’t cover things that are not physical damage. And when the risk profile for the current year and future is analyzed, one of the largest risks that a business has is a cyber event or cyber attack. A standard BOP won’t cover that type of risk, you’ll have to have a separate cyber liability policy or an endorsement of your BOP for cyber coverage. And this has been proven in court.

There was a case that happened in Ohio where a company had a $35,000 loss from a cyber attack with ransomware. They put in a claim on their BOP, but the Ohio supreme court said it’s very clear in the language of the policy that a cyber event is not covered because there was no physical damage. What had happened was this company was hit with a ransomware attack and the hackers asked for $35K to give computer and file access back to the company. The company paid the ransom, but it was rejected by the insurer as a coverable event. This is where it’s very important to understand cyber risks and business interruption risks that come from ransomware and may not be covered by a BOP or CPP.

So double check your policy. Again, we’re not attorneys and this isn’t legal advice. We’re also not your insurance agent, so check with your broker or agent to find out what specific coverages you might need to get to ensure that your business and livelihood are safe from a cyber event.


Don’t leave your business vulnerable to cyber attacks.

Get a quote for cyber liability insurance from Risk Coverage.

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