Establishing effective and efficient cyber security policies is one of the most important aspects of protecting your business. We often discuss why cyber security is so important and the different cyber security practices your business can implement. We also mention how advanced cyberthreats and cyberattacks have become as hackers improve their tactics and technology. For this reason, you may wonder if there’s anything that will cover your business if it falls victim to a cyberattack even though you have strong cyber security practices in place. Thankfully, cyber insurance is available to business owners who have proven they take cyber security seriously.
Cyber insurance (sometimes referred to as cyber liability insurance) is the coverage an organization can acquire to protect against losses incurred by a data breach or other malicious security incidents. Cyber insurance policies have grown exponentially in popularity over the past few decades as cybercriminals have become more cunning. Because of this, cyber insurance prices have also risen, so you may be curious whether cyber insurance is something your business absolutely needs.
Cyber insurance policies differ from provider to provider, but most will include the following coverages:
Customer And Employee Outreach
If your business is the victim of a cyberattack and precious information is stolen, who are some of the first people you need to contact? Your customers and employees, of course. They need to be aware that a cyberattack occurred, and their information may have been compromised. Depending on your industry and location, there may be a legal obligation to inform. If you have a large customer base, notifying them of a cyber security breach can be expensive. Cyber insurance will help cover those costs.
Recovering Stolen Data
It can be costly to hire a data recovery professional to recover stolen customer or business information, but it is necessary after suffering a cyberattack. Most cyber insurance policies will pay for a professional’s help.
Software And Hardware Repair/Replacement
Cybercriminals can wreak havoc on your software and hardware. If they damage or corrupt your computers, network, or programs, your cyber insurance policy will help cover the cost of repair or replacement.
Some insurance policies will also cover any financial loss due to business interruption caused by a cyber-attack and ransomware demands. Cyber insurance will not cover your system upgrades, estimated future financial losses due to a breach or decreased valuation of your business caused by a cyber-attack. It’s vital you know exactly what is covered by your policy before beginning coverage.
Starting a new cyber insurance policy is easier said than done. Since cyber insurance has grown in popularity, most providers have become more selective about who they cover, meaning you have to meet some criteria to qualify for a policy. The most essential thing any cyber insurance provider will look at will be the strength of your current network security and cyber security practices. Ensure you utilize multifactor authentication throughout your entire business and hold training sessions annually with your team. Purchase a firewall and do whatever else you can to improve your security. If you don’t, the rates for your policy will be astronomical, if you can even get one at all.
Suppose your business is within an industry that requires a certain level of cyber security compliance. In that case, you should be meeting your requirements, or else you won’t qualify for a cyber insurance policy. This shouldn’t be an issue for your business since you must be compliant regardless of your interest in cyber insurance. Just make sure you look into your compliance requirements before applying for a cyber insurance policy to ensure you don’t get denied coverage.
If you work with third-party vendors, you must do your due diligence and ensure they meet their cyber security requirements. Doing thorough research on the parties you interact with will help you get more affordable cyber insurance rates. Additionally, it would be best if you had an incident response plan in place. The insurance provider needs to know you’re prepared to help your customers and your business if disaster strikes.
Cyber insurance can help further protect your business if you become the victim of a cyberattack. In today’s society, where every business and their customers’ information is a target for cybercriminals, make sure you’re as secure as possible. Build a strong cyber security plan and apply for cyber insurance to get maximum protection.