Understanding cyber liability and data breach coverage

Data risks are not just for big businesses… virtually all companies are at risk—including yours.

When you hear about data breaches, it’s likely that you think of tech companies or a hack at a major retailer that you read about in the headlines. But the fact is, it’s not the sort of thing that only happens to larger businesses or organizations.

Want to understand your risk? Ask yourself:

  • Do you store, own or have access to data?
  • What kind of data is it?
  • How many data records do you have?

The impact of a data breach incident can be extraordinarily costly for businesses without the right protection. In fact, for smaller businesses, the worst cyber breaches cost between $84,000 and $148,000.

What type of data is at risk?

A data breach is an incident in which unauthorized individuals gain access to sensitive, protected, or confidential data. Data breaches may involve a wide range of information, but the data in question often falls into one of two categories:

  • Personal information − such as names, emails, date of birth, street addresses, social security numbers, or phone numbers.
  • Financial information − data from business transactions including credit card or bank account information. If you store these types of data or transact business electronically, you are at risk.

What can happen?

Think about a retail store, restaurant, local gym, or doctor’s office. All of these businesses have one thing in common—they have employees’ and customers’ personal and financial files that could be exposed.

What if…

  • A phishing email is opened and exposes the network?
  • An employee loses a laptop with sensitive information?
  • A rogue employee steals information?
  • Sensitive information is improperly discarded?
  • A credit card system is compromised?
  • A firewall fails and hackers access sensitive information?

All of these could happen to any business at any time. Would yours be prepared?

Being proactive is key

“Data is one of the most valuable assets your company has—and one of the most vulnerable. Increasingly, hackers and malicious threats are targeting smaller businesses because they think they aren’t paying attention. It is crucial to have plans in place to keep your data safe at every touch point, protect your systems, monitor for intrusions and be ready to mitigate a breach.”

— Brian Haugli, Chief Information Security Officer, The Hanover

Complete cyber protection

Data breach coverage

This coverage provides protection for expenses that businesses pay in an effort to manage the fallout from a data breach. These costs may include:

  • Investigation
  • Customer notification
  • Credit monitoring
  • Public relations
  • Data restoration
  • And more

Cyber liability coverage

This protection covers costs that stem from a lawsuit against a business, alleging financial damage as a result of a data breach. These lawsuits may be the result of identity theft or compromised financial information that results in loss for customers.

How to recover from a breach

Expert forensic analysis can help your company understand how a breach occurred, determine the extent of the breach, and highlight vulnerabilities. Data breach coverage often covers these costs.
Each state has its own breach notification requirements. Data breach coverage includes the cost to notify affected parties, credit monitoring services, and, when necessary, monetary assistance to develop a public relations response.
Partner with a third-party IT company to ensure your data is secure. Develop a plan to prevent and respond to incidents. The Hanover’s CyberScout services can assist with preparation.
You’ve successfully managed this breach. But, if any of your customers are faced with financial loss due to this breach, your cyber liability coverage can protect you from related lawsuits.



  • 2017 Ponemon Institute Cost of a Data Breach Study
  • Human error cited as leading contributor to breaches, study shows. SC Magazine.
  • Cost of Data Breach Study, IBM, 2016
  • Small Businesses: The cost of data breach is higher than you think, First Data, 2014
  • Internet privacy in the digital age, Champlain College
  • Cybercrime and hacking are even bigger worries for small business owners, The Guardian (U.S. edition), January 21, 2015

All products are underwritten by The Hanover Insurance Company or one of its insurance company subsidiaries or affiliates (“The Hanover”). Coverage may not be available in all jurisdictions and is subject to the company underwriting guidelines and the issued policy. This material is provided for informational purposes only and does not provide any coverage. For more information about The Hanover visit our website at www.hanover.com.

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