Protect your business against the costs of data breaches & AI hacks with cyber liability insurance.
Cyber liability insurance pays for the costs a hack, ransomware attack, or data breach drops on your business: forensic investigators, customer notification, restoring your systems, lost income while you are down, and lawsuits from the people whose data was exposed. Most general liability policies exclude those costs, which is why cyber coverage is written as its own policy or endorsement.
Bailey Insurance Agency is an independent agency serving Clayton, Garner, and Johnston County. We represent multiple carriers, including Erie Insurance, so we can compare cyber options side by side and help you make an informed decision about what your business actually needs.
Insurance that helps cover the risk of getting hacked.
Getting hacked isn’t just a hassle. It also poses a potentially huge and unexpected cost to your business. Cyber liability insurance is a specialized policy that helps cover many of the risks your business faces from an information breach—and may even cover some risks you might not have thought of.
What does a cyber liability policy cover?
A cyber liability policy covers two kinds of loss. First-party coverage pays your own costs after an attack. Third-party coverage pays when customers, partners, or regulators come after you because of it. Policies vary by carrier, so the declarations page matters, but most small business cyber policies are built from the same pieces.
Ransom and fraud coverages often carry their own lower limits and deductibles, and some carriers add them only by endorsement. We walk through each one with you before you buy.
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Cyber Liability Coverage
Risk Factor
The Internet has spun a whole new web of liability exposures. E-commerce, social networking, cloud storage, and other technologies bring great benefits to large and small businesses alike. But with these benefits also come challenges, including protection of privacy, data, and financial information of your customers. If this information is lost, stolen, or compromised, your company is at risk. In fact, you may even be required by law to alert those impacted by the breach and to pay for any financial loss incurred.
Solution
Cyber liability coverage offers protection due to unauthorized access of electronic data or software within your network. It also provides coverage for spreading a virus, computer theft, extortion, or any unintentional act, mistake, error, or omission made by an employee. This coverage is quickly becoming more and more important as you embrace technology to help run your business.
First-Party Coverage
Risk Factor
If your company is faced with a data breach or cyber-attack, you may be forced to cover breach-related expenses such as crisis management, hiring a public relations firm to manage a data breach incident, costs associated with forensic analysis, the cost of repairing and restoring computer systems if there is a virus that destroys business software and data, and the loss of business income resulting from a data breach.
Solution
First-party coverage will insure your business for losses to your own data or lost income or for other harm to your business resulting from a data breach or cyber-attack. This coverage will pay you for things like business interruption, the cost of notifying customers of a breach, and even the expense of hiring a public relations firm to repair any damage done to your image as a result of a cyber-attack. Having this funding available in the event of a crippling hack can keep the lights on till you’re able to resume your normal business operations.
Business Income
Risk Factor
What would you do if an email virus impacted the operation of your database and prevented you from serving clients for a day or more? Or what if a hacker or cyber-criminal caused a system outage or extended downtime, leaving your business inoperable? These and other events can destroy your ability to serve clients and bring in revenue, which can have a major long-term impact on the viability of your business.
Solution
Business Income and Business Interruption coverages help with financial hardships, such as loss of income or operating costs, that you bear due to a covered incident.
Third-Party Coverage
Risk Factor
If your business handles sensitive customer data (such as email lists, credit card records or other files), data breaches pose a serious threat to your financial stability. A lawsuit resulting from a data breach means your business is responsible for paying legal fees, court-ordered judgments or settlements and other court-related costs.
Solution
Third-party coverage protects you in the event of a lawsuit brought by a customer or partner for a data breach that your business' actions or negligence allowed.
Regulatory Claim Coverage
Risk Factor
If your business experiences a data breach or violation of confidential information during regular business operations, you may be found in violation of privacy laws and be required to pay fines for the violations or other regulatory issues.
Solution
You may be eligible for regulatory claim coverage which would offer protection in response to proceedings related to disclosure laws and other governmental actions that can result in defense costs, fines and/or penalties. Coverage does vary and may be restricted by local law.
Ransom Coverage
Risk Factor
If hackers gain control of critical systems, they may demand a ransom be paid to avoid additional consequences. Sometimes these can be empty threats, but it’s impossible to know for sure. Paying the ransom can be costly. Taking a chance by choosing not to pay can sometimes put a company out of business.
Solution
Coverage for ransom and cyber extortion can be included in cyber liability policies and can help cover the cost of ransom to regain control of network systems. This is often not included in a standard policy, may include a separate sublimit and deductible, and may require adherence to certain conditions set forth by the insurer.
Doesn’t my general liability policy already cover a data breach?
Usually not. In 2014 the Insurance Services Office, which writes the standard policy forms most carriers build on, introduced an exclusion (CG 21 06) that removes general liability coverage for injury or damage arising from the access to or disclosure of confidential or personal information, including notification and credit monitoring costs. Many general liability and business owners policies now carry that exclusion or one like it.
Your general liability insurance still protects you if a customer slips in your lobby, and your business owners policy still covers a fire or a break-in. Neither was written to pay a forensic firm, mail thousands of breach letters, or replace income lost to ransomware. Some carriers offer a small data breach endorsement on a business owners policy. It helps, but the limits are often modest. Send us your current policy and we will tell you which one you have.
What North Carolina law requires after a data breach
North Carolina’s Identity Theft Protection Act applies to any business that owns or licenses personal information of North Carolina residents. Personal information means a person’s name combined with items such as a Social Security number, driver’s license number, bank or card account number, PIN, email password, or biometric data. Under N.C. Gen. Stat. § 75-65:
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you must notify affected people without unreasonable delay after discovering a breach;
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if you notify anyone, you must also notify the Consumer Protection Division of the NC Attorney General’s office, describing the breach, how many people were affected, and what you did about it;
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if you notify more than 1,000 people at once, you must also notify the nationwide consumer reporting agencies;
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a violation is treated as an unfair trade practice under § 75-1.1, and injured individuals can sue.
Some businesses carry federal duties on top of that. Auto dealers, mortgage brokers, and tax preparers fall under the FTC Safeguards Rule, which since May 2024 has required notice to the FTC within 30 days of a breach affecting 500 or more consumers. Businesses that take cards also answer to their bank and the card brands.
Notification, legal review, and regulator correspondence are the costs a cyber policy’s breach response coverage is built to pay. This is general information, not legal advice; your attorney can tell you how these rules apply to your business.
What happens in the aftermath of a cyber-attack?
What happens during cyber-attacks matters, but the consequences after that are what really make an impact on your business, as well as your customers. What your business does in reaction to the data breach may lead to a hefty, unexpected cost for your business. Not to mention dealing with the aftermath of a cyber-attack could close your business temporarily, which could result in a loss of income. A number of action steps must be taken once your business has experienced a cyber-attack and breach of data. These steps include:
- Notifying customers and clients of the data breach.
- Restoring your business’s website to working order.
- Dealing with extortion attempts.
- Paying damages to clients, customers, and suppliers.
Proactively identifies weak points in cyber security.
In addition to protecting your business against cyber risks financially, obtaining cyber liability insurance may also help reduce potential risks. Insurers may walk through your current cyber-defenses and identify potential weaknesses that you need to fill in. By bolstering your cyber security, you may be able to help prevent data breaches from happening in the first place.Need cyber liability insurance for your business? Contact us to go over your business needs and coverage options.
Two free resources are worth a look before you apply: the NC Department of Information Technology’s cybersecurity resources for small businesses, and CISA’s Cyber Essentials guide for small business leaders. Many of the controls they recommend are the same ones carriers ask about on a cyber application.
How much does cyber insurance cost?
The premium depends on your industry, annual revenue, how many customer and employee records you hold, how you take payments, and the security steps you already have in place. Carriers commonly ask about multi-factor authentication, offsite or offline backups, and employee phishing training on the application, and stronger answers can mean better terms. We do not publish prices because two businesses on the same street can price very differently; we quote yours.
It helps to weigh the premium against what an incident costs. Verizon’s 2026 Breach Impact Study, built on insurance claims data, put the median impact for businesses under $ 25 million in revenue at about $ 38,000, with the worst cases reaching several percent of annual revenue. Erie Insurance reports that its average small business cyber claim paid in 2025 was about $ 33,000. For a small business, that is often more than a month of revenue.
Cyber coverage from Erie and the other carriers we represent
Erie Insurance offers Cyber Suite as an add-on for businesses with an ErieSecure Business policy. It includes data breach response expenses, computer attack restoration and business interruption, cyber extortion, misdirected payment fraud, computer fraud, and telecommunications fraud, plus privacy incident, network security, and electronic media liability. Erie also gives Cyber Suite customers access to its Cyber Safety service for help with prevention.
Cyber Suite is a strong fit for many Johnston County businesses that already carry an ErieSecure Business policy. A business that holds a lot of sensitive data, runs high card volume, or has contracts with specific cyber requirements may need a standalone cyber policy with higher limits. As an independent agency, we can quote both and show you where the coverage differs.
Not sure your business needs it?
If you take cards, store Social Security or driver’s license numbers, or pay invoices by email, the answer is probably yes. Our post Does My Clayton Business Need Cyber Insurance? walks through five questions that settle it, with local breach numbers from the NC Department of Justice and the FBI.
Bailey Insurance Agency is an independent insurance agency at 13515 Cleveland Rd in Garner, serving businesses across Clayton and Johnston County. Your needs are unique, so we start by asking what data you keep, how you take payments, and what your contracts require, then compare cyber coverage from Erie and the other carriers we represent. Request a free cyber liability insurance quote, or call 919-589-7580.
Cyber Liability Insurance FAQ
What is cyber liability insurance?
Cyber liability insurance is a specialized policy that helps cover the risks your business faces from an information breach. It may help cover expenses associated with a cyber-attack, and some policies also include media liability coverage, which can help with claims such as inadvertent copyright infringement.
What does cyber liability insurance cover?
A cyber liability policy may help cover many of the expenses associated with a cyber-attack, including notifying customers and clients of the data breach, restoring your business’s website, addressing extortion attempts, and paying damages to clients, customers, and suppliers. Coverage varies by policy, so it’s important to review your specific policy with your agent.
Does cyber liability insurance cover loss of business income?
Some commercial cyber liability policies may cover loss of business while your systems are compromised or unavailable. Because dealing with the aftermath of a cyber-attack can temporarily close your business, this coverage can help offset the income you lose while getting your systems back online. Waiting periods and how income loss is calculated vary, so it’s worth reviewing the coverage with your agent.
What types of cyber-attacks does cyber liability insurance cover?
Cyber liability insurance may help cover a range of common cyber-attacks, including data breaches, ransomware and extortion attempts, phishing scams, social engineering attacks, and denial-of-service attacks that take your systems offline. Coverage varies by policy, so it’s important to review your specific policy with your agent to understand which types of attacks are included.
Does general liability insurance cover a data breach?
Usually not. Since 2014, many general liability policies carry a standard exclusion for injury or damage arising from the disclosure of confidential or personal information, including notification and credit monitoring costs. Some business owners policies offer a small data breach endorsement, but its limits are often low compared with a dedicated cyber policy.
What does cyber insurance not cover?
Most cyber policies exclude losses you knew about before the policy started, physical damage to property, the cost of improving your security beyond what it was before the attack, and lost future profits from reputational harm. Ransom and fraud coverages often carry lower sublimits. Ask us to walk through the exclusions page before you buy.
How much cyber insurance does a small business need?
It depends on how many records you hold, your card volume, how long you could operate offline, and what your contracts require. Start by estimating notification costs for every customer and employee record you store, then add a month or more of lost income. We can help you size limits to that number.
Does Erie offer cyber insurance for businesses?
Yes. Erie Insurance offers Cyber Suite as an add-on for businesses with an ErieSecure Business policy. It covers data breach response, computer attacks, cyber extortion, several kinds of payment fraud, and privacy and network security liability. As an independent Erie agency, we can quote it alongside the other carriers we represent.
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