Do You Need Cyber Liability Insurance?

By Dr. Greg Jorgensen
Rio Rancho, NM –

I recently watched the AAOIC’s Annual Risk Management DVD and took the quiz so that I could save 10% on my insurance premium. One of the new topics mentioned was cyber liability insurance. I had never heard of it. What is it and do you really need it?

According to InsureNewMedia, a company specializing in insurance solutions for technology, software, and Internet businesses, (, if you have a website you are legally considered a publisher and are liable for all things associated with it. These include infringements of intellectual property, virus transmission, and email liabilities of all types.

Do you have legal rights to all of the pictures used on your website? How about the content found thereon? The InsureNewMedia story cited an example of a 1999 lawsuit in which a website was successfully sued for improperly displaying a sport celebrity’s name and photograph. The settlement for “fair market value” was $750,000. The legal area of cyber liability is in its infancy and there is no telling what will be included in future lawsuits.

In her article “6 Reasons You Should Have Cyber Liability Insurance,” ( Minda Zetlin explains another common liability that faces small businesses: the breach of the data on our servers. Cyber liability insurance may cover the costs of notifying patients, income lost by the interruption of your business due to a malicious hack, the hiring of a PR firm to repair damage to your reputation, and even fines imposed for HIPAA violations. Zetlin also states that we are legally liable for patient data that is hosted “in the cloud.”

The AAO Insurance Company’s general liability policy excludes issues related to the Internet. If you want to be covered, you will need to invest in a separate cyber liability policy. For more information, call the AAOIC at (800) 622-0344.

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