There’s no end in sight for cyberattacks that keep getting more sophisticated. Besides fortifying their IT network defenses, organizations invest in cyber insurance policies to mitigate some of the effects of a data breach. Understanding how to protect your business with the right cyber insurance coverage is vital for a healthier bottom line.
Cyber insurance is a policy that cushions businesses against the adverse effects of hacking and other data breach events. It can cover your organization against business disruption and significant financial losses from a cyberattack.
Does My Business Need Cyber Insurance?
If your business model relies on computer networks for storing, processing, and sending electronic data, you most likely require insurance protection. The private data you’re handling that belongs to customers or employees can be a target for a cyberattack. If you own a website or online store, you should consider getting insurance coverage.
What Claims Does Cyber Insurance Cover?
The policies can pay claims triggered by computer network events such as:
- Ransomware and denial of service attacks
- Fund-transfer fraud
- Business email phishing attacks
Cost of Cyber Insurance
Cyber insurance costs depend on the amount of risk involved. Premium estimates consider the probability of a data breach occurring and how much your insurer would pay to compensate you or victims for a covered event. Typical considerations include:
- Business size and annual revenue
- Type of business data covered (health and finance sectors tend to pay more for coverage due to the sensitive nature of the information they handle)
- The overall security of your IT systems
Extent of Coverage
You’re generally covered for losses or expenses incurred immediately after a cyberattack on your IT network. You may be compensated for costs like:
- Data recovery
- Data breach forensic analysis
- Attorney fees if sued in court
- Compensation to third-party data breach victims, such as customers
- Some policies cover ransom payments to attackers
- Corporate email phishing fraud
Not all business losses associated with a cyberattack are covered. Excluded cyber risks include:
- Loss of intellectual property
- Reputational costs, such as lost business as customers lose faith in your ability to protect their sensitive data
How to Get a Cyber Insurance Policy?
Before applying for a cyber insurance policy, make sure you have proper cyber risk mitigation measures. Thoroughly investigate your digital footprint and fix any security vulnerabilities uncovered. These steps can help lower your cyber insurance costs.
Cyber Insurance in 2022 and Beyond!
Insurance companies are moving away from reactive approaches to cyber insurance coverage. Instead, they favor a proactive model in which they serve as a cyber security risk advisor for their clients. In this role, they help businesses fortify their IT defenses to prevent network breaches.
Cyber insurance is a worthwhile investment considering the increasingly high risk of cyberattacks on business IT networks today. Contact our experts at Singh Agency today to help protect your company with the right cyber insurance policy. In addition, we can help you with risk mitigation strategies to protect your business operations.