Cyber hacking is on the rise and any business network is at risk for hacking. If this happens, the result is often a release of information that is supposed to be private: Employee Records, Social Security Numbers, Customer Information, etc. This is desirable information for a hacker and can lead to their criminal profit. It also creates a liability for the business that has been hacked. Large companies like Sony, Home Depot, Target and Burger King have been hacked and it can happen to small companies as well. This is true despite all efforts at network protection.
In response to the hacking risk, most standard liability insurance policies are now endorsed to exclude liability for any data breach. The exact exclusion is as follows: All this considered, having an insurance policy that specifically protects your business against cyber liability risk makes good sense.
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