Does Your Business Need Cybersecurity Insurance?

Cyber attacks aim to destroy, disable, steal, and gain unauthorized access to a network or computer. These attacks can impose a great threat to businesses and organizations. Cyber liability insurance coverage protects businesses of all sizes from the cost of cyber attacks and data breaches.

What is Cyber Security insurance?

Cybersecurity Insurance (cyber insurance), which is also known as Cyber Liability Insurance, provides businesses the coverage that protects against losses associated with cyber attacks and data breaches.

It can cover the cost of the following, and more:
  • Lost revenue due to a cyber security incident (and while your business recovers)
  • Costs associated with a privacy breach, such as notifying your consumers, customer support and costs of providing credit monitoring services to affected consumers
  • Ransom demands
  • Business interruption
  • Costs for recovering compromised data
  • System damage repair costs

Type of Cyber Insurance Coverage

First-party cyber liability insurance covers the insured’s own damages from data breaches and cyberattacks that directly impact you, at your own business and respond on your own network and systems. This type of cyber insurance doesn’t cover the costs of the affected stakeholders or other third parties.

A Cyber Insurance first-party coverage covers a variety of insurable cyber incidents that include:

  • Malicious or accidental destruction of data
  • Data loss and asset recovery
  • Reimbursement of lost revenue due to cyber attack
  • Ransom costs to restore access to data and systems
  • Company’s reputational damage after a cybersecurity or data breach
  • Costs of notifying the affected customers, vendors, and stakeholders
  • Forensic probe
  • Crisis management
  • Lost profits during downtime due to a cyber attack
Third-party cyber liability insurance protects businesses that are responsible for others’ online security. This type of cyber insurance covers lawsuits or legal costs associated with claims by your clients, business partners or vendors who suffered losses because of the occurrence of data breaches on their network or systems.

If a client sues you over a data breach incident, third-party cyber insurance will help cover legal costs and damages.

Third-party cyber liability risks that may prompt a lawsuit to name a few, include:

  • Accidental forwarding of bugged email message that launches malware on the recipient’s computer
  • Authorizing an email virus to infiltrate a client’s network via a security hole
  • Failure to patch a security flaw that allows an unauthorized user access to restricted resources
  • Data theft because of weak passwords
  • Failure to comply with industry regulations

Is It An Essential Step For Your Business?

The answer is yes. And now is the time to consider adopting a cyber insurance policy into your business particularly if you are a small business operating in today’s digital world. Cyber liability coverage will protect your business against the risk of cyber events, including those associated with terrorism.

Cyber insurance is specifically designed to cover financial losses that your business incurs as a result of cyber attacks and data breach incidents. While antivirus and other security measures are still necessary for business security, it may no longer be sufficient to provide complete cyber protection.

Conclusion

Cybercrime has been on the rise, especially these days. While technology advances, the methods and strategies of cyber criminals to infiltrate IT security systems. Cyber liability insurance is not a one-size-fits all solution as policy differs and its cost depends on a number of factors such as your company revenue, the size of your business, the number of your employees, and the industry that you operate in.

Cyber insurance providers will work closely with you to assess your company’s cyber vulnerabilities and help you identify the extent of coverage you may need and customize the appropriate policies for your business.

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