cyber liability
Definition
Cyber liability refers to the legal and financial responsibility a business faces when a data breach or cyberattack exposes or compromises sensitive customer or employee information. If hackers steal credit card numbers from your system or a ransomware attack shuts down your operations, your business can be held responsible for the resulting damages. Cyber liability insurance helps cover the costs of notifying affected customers, legal fees, and regulatory fines that follow these kinds of incidents.
Example
A local restaurant stores customer credit card information online and gets hacked, exposing thousands of payment records, and the business now owes notification costs, credit monitoring services for affected customers, and potentially faces lawsuits from those customers.
Watch Out
Many standard business insurance policies do not cover cyber incidents at all, so you likely need a separate cyber liability policy to protect yourself.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.