What is not covered by cyber liability insurance?

Complete Guide to Cyber Liability Insurance Exclusions

Why This Question Matters for Colorado and Utah Residents

With more commercial vehicles and connected technologies on Colorado and Utah roads, understanding what your cyber liability insurance does not cover is crucial. Cyber exposures can impact everything from payroll to fleet tracking—especially for businesses relying on GPS, telematics, or online scheduling tools. Regional risks such as fast-growing tech adoption in Boulder and Salt Lake City, or increased small business hacking attempts on I-25 and I-15 corridors, mean local companies must be proactive about cyber protection.

• Rapid Tech Growth: Colorado and Utah rank among the top states for new business startups and tech-enabled fleets, increasing potential cyber targets.
• Commercial Auto Telematics Uptake: Many regional businesses use data-tracking on vehicles, making them vulnerable to digital breaches.
• Region-Specific Attacks: Both states have seen rising ransomware and phishing targeting local logistics, retail, and service firms—heightening the importance of understanding insurance boundaries.

What Most People Get Wrong

It's a common misconception that cyber liability insurance covers all digital or data-related incidents. Many assume it automatically covers employee wrongdoing, ongoing data breaches, and fines—when in fact, most policies exclude these events. In Colorado and Utah, where independent contractors, gig workers, and third-party app integrations are common, these exclusions can leave businesses exposed if not carefully managed.

Another misunderstanding: assuming that damage from hacked vehicles (e.g., bodily injury or property damage caused by a hijacked fleet truck) falls under cyber liability—when those are generally addressed by commercial auto policies, not cyber insurance.

The Complete Picture

Cyber liability insurance excludes several categories of loss that every Colorado and Utah business should know:

• Pre-Existing or Ongoing Breaches: Incidents that began before the policy start date or were not promptly reported.
• Intentional Acts by Insiders: Fraud, theft, or sabotage by owners, partners, or employees.
• Failure to Maintain Security: Claims arising from neglecting basic cyber hygiene, such as skipping updates on GPS/telematics software or ignoring recommended security protocols.
• Certain Government Fines & Penalties: Especially those outside the U.S. or related to regulatory actions beyond the policy’s jurisdiction.
• Bodily Injury/Property Damage: Physical harm to others or property—like a fleet crash caused by hacked software—typically falls under your commercial auto policy.
• Contractual Liabilities: Losses your business agrees to assume by contract, unless specifically endorsed.
• War, Terrorism, or Infrastructure Failures: Cyber wars, power grid failures, or terrorism events often fall outside standard coverage.

If you operate a business in Larimer County, Denver, Salt Lake City, or nearby regions and rely on technology for vehicles or client data, it’s vital to work with a local expert who understands how standard cyber, professional, and commercial auto coverages overlap—and where gaps remain. According to regional stats, uninsured cyber incidents have cost Colorado businesses an average of $62,000 per event, with out-of-pocket expenses exceeding $100,000 when insider actions are involved.

Making the Right Decision for Colorado and Utah Residents

Question 1: Am I maintaining the minimum cyber hygiene required?

Insurance companies may deny claims if your business fails to keep software updated, train employees, or use basic security tools:

• Are your fleet and office devices regularly updated and patched?
• Do you have employee training on phishing and password security?

Question 2: Are there business operations or employee actions not covered?

Cyber liability often excludes losses from intentional actions by partners or employees (such as fraud or unauthorized data transfers). In Boulder, for example, a local delivery service wasn’t covered when a driver, acting against policy, shared sensitive route data with a competitor.

Question 3: Is my commercial auto policy aligned with my cyber policy?

Review where physical and digital risks overlap. For example, a Salt Lake City shuttle company discovered that a software breach affecting their vehicles’ remote start system triggered only their auto—not their cyber—coverage. Coordinate with your agent annually to close any gaps as vehicle tech advances in Colorado and Utah businesses.