A Ransomware Attack Just Locked Your Business Files. Will Insurance Cover It?
Monday morning. Every computer shows the same message: "Your files are encrypted. Pay or lose everything."
Your customer database, financial records, and years of documents—locked. You're legally required to notify affected customers. Your business shuts down while you recover.
Your general liability policy won't cover any of it.
Why California Businesses Need Cyber Liability Insurance
You don't need to be a tech company to be targeted. Small businesses are attacked more frequently because they have weaker security and valuable data.
Common cyber incidents:
Ransomware attacks that lock your systems
Data breaches exposing customer information
Phishing scams compromising bank accounts
Employee accidentally emailing confidential data
Stolen devices containing customer records
California's strict data breach laws require businesses to notify customers and provide credit monitoring when personal information is compromised—a process that can be extremely costly.
What Cyber Liability Insurance Typically Covers
Your direct business costs:
Forensic investigation and data recovery
Business income lost while systems are down
Public relations and crisis management
Legal counsel for notification requirements
Ransom payment costs (policies vary on this)
Third-party liability claims:
Customer lawsuits for exposed data
Regulatory fines and penalties
Credit monitoring for affected customers
Legal defense and settlements
Important: Coverage varies significantly between policies. Not all cyber insurance is the same—some policies have important exclusions or limitations.
Who Needs Cyber Liability Insurance?
Every business that:
Stores customer information digitally
Processes credit card payments
Uses email or operates a website
Maintains employee records electronically
Higher-risk businesses: Medical offices, law firms, accounting firms, real estate agencies, retailers, and restaurants accepting online payments.
The Cost of Going Without Coverage
Research shows that 60% of small businesses close within six months of a major cyber attack. Recovery costs—including forensics, notification, lost income, and legal fees—can easily reach tens or hundreds of thousands of dollars.
Your general liability policy explicitly excludes cyber claims. Without separate cyber coverage, you pay these costs entirely out of pocket.
Why Work With Carlton Insurance Agency LLC
Specialized carrier access. We work with insurance companies that offer cyber coverage—not just weak endorsements added to general policies (although some businesses opt for that approach).
We explain policy differences. Cyber policies vary significantly in what they cover. We help you understand what you're actually buying and identify any important exclusions.
Do You Need Cyber Coverage?
Ask yourself:
Do you store customer or employee information digitally?
Could your business survive weeks offline during recovery?
Would a major data breach threaten your business financially?
Are you confident your current insurance covers cyber incidents?
If you answered "yes" or "I'm not sure"—let's discuss cyber liability coverage.
Get a Free Insurance Consultation
We'll listen to your business operations and review your current coverage to determine whether cyber liability insurance makes sense for your situation, and provide quotes from carriers we work with.
Contact us today:
carltoninsurance@carltoninsuranceagency.com
Tel: (310) 320-7070
Fax: (310) 212-5556
Carlton Insurance Agency LLC
CA Insurance License #6011131
Protecting California businesses from cyber threats
21710 Madrona Ave
Torrance, CA 90503
Disclaimer: This article provides general information about cyber liability insurance. Coverage specifics, exclusions, and premium costs vary by carrier, policy form, and your individual business circumstances. Not all policies cover the same incidents or provide the same protections. Contact us to discuss specific coverage options and accurate pricing for your business.