We’ve all heard about cyber-attacks: whether it’s a retail store suffering a data breach, causing thousands of consumers’ personal information to be leaked, or Russia hacking into e-mails to influence an election, there seems to be a different event in the news all the time. But what can you do to protect your business?
Cybersecurity, or cyber insurance, is a fairly new coverage that all businesses should consider. Security breaches are becoming increasingly common and can be very expensive. Cybersecurity insurance helps companies recover from losses caused by events including a network outage, data breach or service interruption. This insurance transfers at least some of the financial risk of such a breach or interruption to the insurer.
First-party insurance typically covers damage to a company’s digital assets and losses due to business interruptions. Damage to reputation is covered by some policies. Third-party insurance covers your liability for the security breach and associated costs, including investigations, customer notification, credit monitoring, public relations, and legal representation.
And it’s not just large businesses that are targets of cyber-attacks in today’s world. No business is immune to network outages and data breaches. Losses can include lost business opportunities, lost customers, a damaged business reputation, and stolen data or funds.
Be aware that cyber insurance policy premiums are “not one size fits all,” as premiums are based on a company’s industry, kind of services provided, data risks and exposure, computer and network security, and even a company’s annual gross revenue, plus more. The insurance industry still perceives the risk exposure for cyber insurance to be very high. As a result, only a few major carriers offer cyber insurance. The options will likely expand as cyber threats continue to increase, and demand for coverage grows.
Before you buy cyber insurance, investigate what risks are covered by your existing insurance coverage as there may be overlaps with a cyber insurance policy. Cover only your true cyber exposure.