You’re spending a relaxing weekend with family and get a text message from your IT director who says your servers have been hacked and names, account information and social security numbers of hundreds of your customers have been stolen.

Your first email on Monday morning comes from the marketing department who says one of the salesmen has been posting slanderous information about your main competitor on various industry blogs. The defamed firm is now seeking damages for lost sales revenue.

You get a call from the field saying a former employee has made off with electronic files containing sensitive medical information about a nationally known client and sent them to various media over night. The celebrity’s lawyer is already talking lawsuit.

Professional services over the Internet could be the tip of a liability iceberg for companies that provide information or professional services over Internet, users of e-commerce of any sort, organizations using the Internet for marketing, as well as for web site developers. More unknown problems could lurk just below the surface. Just having employees connect with other people, activities gathering and retaining data or purchasing items from websites can create unseen liability problems.

With these issues in mind, a relatively new product called Cyber Liability Insurance should be considered part of an overall comprehensive risk management program for any organization involved in maintaining a web site or performing any type of business through the World Wide Web.

Cyber Liability Insurance works similarly to other types of liability insurance in that it is a third party insurance. It covers court costs and judgments/settlements for claims brought against the business. Claims picked up by Cyber Liability Insurance can include: violation of privacy, financial harm caused by service failure, unauthorized access or use, denial of service, or infection by malicious code. Coverage can be extended to cover the cost of notifying affected individuals and public relation costs to protect your brand.

Some organizations believe they wouldn’t need this type of coverage because of the use of firewalls, encryption, security authentication or monitoring programs. But, according to the 2009 Data Breach Investigations Report by the Verizon Business RISK Team, nearly 70 percent of breaches were found by third parties and 75 percent of those had occurred weeks or months before they were discovered. No one is 100 percent safe. Small businesses are just as vulnerable as large ones, whether involved in E-commerce or not.

If you develop and maintain a website or perform any type of business through the Web, you should make Cyber Liability Insurance an essential part of your risk management review.

Your professionals at Riviera Insurance can provide more detailed information on how Cyber Liability Insurance works and how it can protect your organization against financial disasters. Give us a call today to get this important protection started.