As business owner or manager, you're undoubtedly familiar with the wide range of potential hazards threatening your business. One type of protection that is becoming increasingly vital is cyber insurance, coverage designed to safeguard you in specific, undesirable situations.
Unfortunately, a significant number of businesses fail within two years of suffering a data breach, if they don't shut down immediately.
The Role of Cyber Insurance
Cyber insurance, also known as cyber risk insurance or cyber liability insurance coverage, is a specialized form of professional liability insurance that emerged in 2005. Whenever the topic of data leaks arises, the inevitable financial implications are a significant concern.
Imagine a scenario where your data suffers a breach and your customers information was included in the theft. If there is cyber insurance, the policy would help with the financial burden of the breach. Typical costs arising from such breaches, which could be addressed by cyber insurance, include:
- Notification costs to customers
- Fines and penalties
- Expenses linked to the breach investigation
- Charges for credit monitoring
- Costs associated with defending against regulators' claims
- Losses from identity theft
In addition, cyber insurance can cover other liabilities such as business interruption, data destruction, extortion, or fraud.
The intent is to simplify the recovery process for your business after some kind of data disaster, such as theft, takes place. Given the growing number of cyber threats, cyber insurance is an essential safeguard for businesses.
Choosing the Right Cyber Insurance Provider
With numerous reputable insurance providers offering cyber insurance, your options are plentiful and expected to increase. While exploring these options, remember to consider:
- The range of cyber insurance policies provided by the insurer. Are they separate policies or simply an extension of an existing policy? Ideally, seek a standalone policy, customizable to your business.
- How does the coverage impact first and third parties? Does it extend to third parties?
- What is the deductible? Be sure to compare deductibles as you would for any other insurance.
- What events are included in the coverage?
- Is the coverage limited to targeted attacks, or does it cover all attacks?
- Does the policy cover social engineering threats, like phishing, or only network attacks? For advanced persistent threats, does coverage apply within certain timeframes?
Keeping these considerations in mind during your selection process will assist in finding the most suitable insurance for your business.
Preparation is Key
To secure the best deal from your insurance provider, it is essential that you demonstrate your commitment to cybersecurity. Adherence to security best practices and assessing your business’ vulnerabilities, possibly through a penetration test, can enhance your standing with the insurer.
It's equally important to show that your organization is aware of best practices and capable of identifying social engineering attempts. This reflects your active efforts to maintain a secure environment.
We are here to help you. We offer services to evaluate your existing security measures, detect vulnerabilities, and implement the needed cybersecurity solutions. Contact us at (978) 482-2020 to get started with a consultation.