Traditional business-owner and general liability policies have significant coverage gaps in today's cyber environment. In response, Nationwide debuts its first commercial lines cyber coverage with three endorsements for business-owner packages.
PRODUCT: Cyber Coverage for Business Owners
COMPANY: Nationwide
BEST RATING: A+ (Superior)
AVAILABILITY: Coverage is available through Nationwide’s exclusive and independent agency partners.
FOCUS: Small and mid-sized businesses are particularly vulnerable to cyber risk—in fact, many have already experienced a data breach. “Any business that has sensitive data on hand or that is dependent upon its systems to keep its business running needs some form of cyber insurance for added protection,” says Tony Fenton, associate vice president, Nationwide commercial lines.
But many small businesses do not have a cyber security plan in place and often no chief information officer or technology specialist on staff. Traditional business-owner and general liability policies have gaps in coverage that are “significant given the amount of breach activity and attacks in the cyber environment,” Fenton says, so “having an insurance product that can respond in the event of a breach is an important coverage.”
In response to this need, Nationwide debuts its first commercial lines cyber coverage with three endorsements for business-owner packages, tailored to cover both first- and third-party exposures for data breaches, computer attacks and identity theft.
Data compromise: Offering limits of up to $1 million, this endorsement helps businesses notify and assist their clients and others following a breach of personal information. This endorsement includes first-party coverage (response expense), which covers notifying clients, employees and others affected by the breach and also provides credit monitoring and identity restoration services to help businesses retain and rebuild clients’ and employees’ trust and goodwill following a breach. The endorsement also includes third-party coverage (defense and liability), which responds to third-party actions that individuals affected by the breach bring against the insured.
Identity recovery: Offering coverage of up to $25,000, this endorsement protects key individuals of the business but does not insure the business identity. It combines identity theft insurance with services to restore victims’ credit history and identity records and covers owners, employees and resident family members of key owners and employees.
CyberOne: With limits available up to $100,000, this two-part endorsement provides first-party hardware coverage, such as malware that destroys hardware; and network security coverage, such as liability for viruses that affect partners’ downstream damage due to security weaknesses in the business’s computer system. Typically, this would protect businesses against damage to electronic data and computer systems from a virus or other computer attack. It also protects a business for liability to third parties.
MINIMUM PREMIUM: Data compromise ranges from $69-$955 depending on the business and limit. Identity recovery is $12 per year when purchased individually and free of charge alongside purchase of data compromise. CyberOne costs $46-$336, depending upon coverages selected.
TARGET: Small and mid-sized businesses, particularly those that store customer data or conduct credit card transactions. Might include retail, medical and professional offices, collection agencies and more.
COVERAGE TERRITORY: Available in Nationwide's operating states (all states except AK, HI, LA, MD, MA, NJ and OK).
CONTACT: Tony Fenton, associate vice president; Nationwide commercial lines, One Nationwide Plaza, Columbus, OH 43215-2220; 614-249-7111.
Amy Skidmore is an IA contributor.
