A common question we hear at KMO Insurance is: “Does my standard business insurance cover ransomware or hacking?” The short answer: typically not, or only partially — unless you’ve added specialized coverages. Here’s what finance and tech companies in Overland Park, KS (or anywhere) should know.
Why Standard Business Insurance (BOPs, General Liability) Usually Falls Short
Many small-to-mid businesses already have a Business Owners Policy (BOP) or general liability insurance. A BOP bundles property and liability coverages into one policy.
However, general liability primarily protects against third-party bodily injury, property damage, libel, or advertising injury. It does not generally cover cyber or digital incidents. Even BOPs with add-ons often exclude or severely limit data breach, cyber extortion, or system restoration costs. Without a dedicated cyber liability or ransomware endorsement, cyber risk is often left out.
In other words, your standard business policy is rarely sufficient when it comes to digital threats.
What a Cyber or Ransomware Insurance Policy Can Cover
To truly protect against hacking or ransomware, you’ll want a cyber liability or ransomware policy (sometimes as a standalone or an endorsement). These policies can include a variety of coverages:
First-Party Coverage
This addresses costs your business incurs directly, such as incident response, forensics, containment, crisis management, public relations, data recovery, system restoration, ransom payments or extortion demands, legal and regulatory compliance costs (including customer notification), business interruption, and lost income during downtime.
Third-Party or Liability Coverage
This helps with defending against claims from clients, vendors, or regulators — for example, lawsuits over data breach or negligence, regulatory fines or penalties, defense costs, settlements, and judgments.
Many modern cyber policies blend first- and third-party coverages. Ransomware-related claims are among the most common in cyber insurance. In fact, ransomware now represents around 75% of all cyber insurance claims.
That said, these policies come with limits, exclusions, and conditions — choosing coverage wisely matters.
Key Gaps, Exclusions & Limitations to Watch For
While cyber or ransomware insurance is powerful, it’s not a cure-all. Some of the most common limitations include exclusions for “acts of war” or state-sponsored attacks, neglect or failure to maintain security, denial of service or network outages that aren’t “attacks,” limits on ransom payments, no coverage for reputational harm beyond PR costs, aggregate policy limits, retroactive claim exclusions, and limited or excluded coverage for supply chain or vendor-caused exposures.
Another factor to consider: the very existence of ransomware insurance can create a “moral hazard” — paying attackers can incentivize further attacks. Carriers are more careful now about underwriting. Still, the right policy paired with strong security controls is one of your best lines of defense.
What Finance & Tech Firms in Overland Park, KS Should Prioritize
If you’re running a finance, fintech, or tech services business in Overland Park, you have unique risks. You likely handle sensitive customer financial data or personally identifiable information. You may have regulatory obligations (data privacy, breach notification). You may be entrusted with client systems or operate SaaS infrastructure.
Here’s how to approach cyber coverage in your locality:
In the Kansas market, cyber liability insurance is increasingly affordable. Kansas firms can often get coverage for digital risks starting at modest premiums, depending on size and exposure.
Case Example: Why a Finance Firm in Overland Park Should Care
Imagine a boutique financial advisory firm in Overland Park, KS. They maintain client asset data, tax documents, and proprietary models. One day, hackers exploit a software vulnerability, encrypting client data and demanding a ransom. The firm must hire forensics and IT specialists to restore systems, pay or negotiate ransom, notify clients and regulatory authorities, defend potential lawsuits for negligence, compensate clients for damages if required, recover lost revenue during business downtime, and protect reputation with PR and communications.
Without proper cyber insurance, these costs can easily reach six or even seven figures — well beyond the scale of a typical BOP or general liability policy. With a robust cyber policy, many of those line items can be covered — giving the firm breathing room and reducing the risk of a catastrophic loss.
Final Thoughts & Action Steps
No, standard business insurance (general liability or a BOP) typically does not cover ransomware, hacking, or cybersecurity attacks. Yes, a proper cyber liability or ransomware policy can cover a broad array of first-party and third-party costs related to breaches, hacking, and extortion.
But those policies come with limits, exclusions, and conditions, so you must read carefully and work with an insurer that understands tech and finance risks. For finance and tech firms in Overland Park, KS, it’s critical to layer cyber coverage alongside rigorous security practices.
At KMO Insurance, we tailor coverage for tech and finance firms, helping clients in Overland Park and beyond protect against digital risks. If you’d like to discuss how cyber liability, ransomware endorsement, or your BOP can align to shield your firm, we’d be happy to help — including structuring your Business Owners Policy to integrate the right riders and coverage. Learn more about our Business Owners Policy