Q: Do I need Data Breach Insurance?
Errors & Omissions Insurance covers lawsuits when your client's network is hacked, but it doesn't cover the cost of a data breach on your own network. For that, there's Cyber Liability Insurance (often called Data Breach Insurance). Truth be told, many IT companies don't need this coverage. It's really only important for businesses that store a lot of private data (credit cards, addresses, financial info, etc.) on their networks.
However, if you have clients with a lot of customer data, you can encourage them to get this coverage. In fact, this can be a smart way to reduce your risk of lawsuit. If a client has insurance coverage for their data breach costs — repairs, response, and customer notification — they're less likely to sue you to recover financial damages. Making sure your clients are prepared for the financial shock of a data breach is a smart way to protect your company.
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