Data breaches, leaks, and loss due to cybercrime have become incredibly common in recent years. Phishing emails are becoming harder to distinguish due to the use of AI and harmful links are everywhere. With the multiple avenues a cybercriminal can use to hack your data, most businesses don’t know how to protect their information online. The way cybercrime is rapidly becoming more advanced, it may be time for your businesses to look into cyber insurance.

What is cyber insurance?

Cyber insurance helps to prevent liability due to a data breach or leak of sensitive customer information. When customers give you their info, whether that involves their credit card numbers, driver’s licenses, or health records, they trust you to keep it safe. If a breach does occur, you don’t want to risk the major legal fines that could result from a breach.

What does cyber insurance cover?

Enrolling in cyber insurance can assist you in:

• Informing customers about a data breach
• Restoring the information and identities of customers who may have been affected
• Retrieving data that’s been compromised
• Fixing any damage to your online system
• Covering potential ransom payments required to get your access back
• Retrieving lost income
• Any lawsuits from customers or employees due to data leaks
• Other legal fees resulting from a breach and more areas that may have been affected.

Doing many of these things after a breach can be expensive and time-consuming. Cyber insurance can help alleviate that stress and help negate some of the negative after-effects of a breach. These gestures will help restore customer loyalty and brand reputation.

What does cyber insurance not help cover?

There may be some things that are excluded from the cyber insurance policy you choose. Talk to the company you’re working with and find out what is not covered in the event of a cyberattack. Here are some examples of what you may still be liable for in the event of an incident:

• Intentional attacks: Any attacks or criminal behavior knowingly committed by you or your employees.
• Prior knowledge: Any indication that you had prior knowledge of these attacks before coverage started.
• Subsidiaries beyond your control: This may include any attacks that affect a subsidiary that you don’t have ownership or control over.
• Interrupted business caused by a third party:  Your cyber insurance might not cover any expenses or costs that result from the failure of a third-party online system.

Who should be worried about cybercrime/cyber-attacks?

Any business that stores any kind of sensitive customer information— bank accounts, social security numbers, addresses, etc.— should take care to protect themselves from cyberattacks. Small businesses are especially susceptible to cybercrime, as they don’t often have an extensive security system. Around 55% of small businesses have experienced some form of data breach. You want to be sure you’re ready for any costs and consequences if it happens to your business.

Business owners and employees in the industries of accounting, consulting, IT, marketing, restaurants, beauty, retail, and many other related fields would benefit from taking cybersecurity precautions and enrolling in cyber insurance.   

How much will cyber insurance cost me?

The cost of your insurance plan depends on several aspects. These may include:

• The amount of risk and exposure your company has to cyber crimes
• The level of coverage needed
• Your company’s annual revenue
• The amount of network security you have
• The number of employees who have access to sensitive data
• Your history of cyberattacks and insurance claims

Various levels of coverage are typically available to business owners. Discuss the cyber insurance company of your choosing and whether a small or large amount of liability coverage would be beneficial for your business. Your plan may be considered an add-on to the business’s main insurance policy, or it may be a standalone policy by itself, covering only cybersecurity. When considering cyber insurance, discuss with the agent what policy would work best for your business, and whether first-party coverage or third-party coverage would be ideal.

Why is cyber insurance important for your business?

A damaging data breach can affect your company’s reputation, profits, customer loyalty, brand recognition, legal situation, and more. Small businesses often struggle to recover from large-scale cyberattacks. Without the preparation and resources to come back from a damaging cyber-attack, just one attack can cause catastrophic losses.

Staying ahead of the attacks and enrolling in a cyber insurance plan can be enormously beneficial. Assistance with consequences that come from a data breach is crucial, and your liability coverage can help your business bounce back after a cybersecurity incident.

Some companies offer a choice between data breach coverage or cyber liability coverage. Talk to your insurance agent about the differences between the two, and which would help your business more. Cyber liability insurance may help bigger companies that need more overall protection, while data breach coverage can help you recover losses after an incident.

Cyber insurance is essential in running a successful business today. As hackers get smarter, and more of our information is out there, companies risk major losses every time they decline liability coverage. Talk to a trusted IT company today for cyber insurance consulting and how to select the best plan for your business.