Advances in communications technology have enabled business owners to find and serve your customers in ways that were never possible before.
That connectedness can also have a dark side, unfortunately, as we’ve seen with the recent rise in security breaches and ransomware attacks on businesses big and small. These attacks can be devastating: 60 percent of small businesses go under within 6 months of an attack. It’s increasingly important to do what you can to prepare, but if your business gets hacked, a Cyber Security Insurance Policy can help you keep it running while you recover.
Who Needs Cyber Security Insurance?
If your business is online in any way, there’s a chance it could be targeted for a cyber attack. Hackers have increasingly sought out smaller businesses, which don’t typically have robust cybersecurity measures in place. Generally speaking, the types of businesses that could benefit from the protection of a Cyber Security Insurance policy are:
- Businesses that handle sensitive customer data: Healthcare organizations, retailers, and financial services providers are popular targets for hackers because of the customer data, like credit card or Social Security numbers they store. A policy can help cover legal fees and judgements if customers sue your business after a breach.
- Businesses with valuable assets or high revenue: When a ransomware attacker knows they’ve breached a more established small businesses, the payment they demand can often be much larger. In this situation, a policy can help cover some of these ransom payments.
- Businesses with many customers: If you have a large customer base and you suffer an attack, a Cyber Security insurance policy can help cover the cost of notifying them of the breach (which is often required by state law) and any regulatory fines that your business might be subject to in the event of a breach.
Of course, the level of risk of a cyber attack for any company comes down to way the business operates and what security measures it has in place. Even if you don’t speak tech, our agents can help you assess your risk level and determine what coverage makes sense for your situation.
What Does Cyber Security Insurance Cover?
Cyber Security Insurance policies can vary in terms of what they provide, but generally there are two main types of coverage:
- First Party Coverage: This type of coverage provides help with recovery costs to your business of a cyber attack. Depending on the type of attack, a first party policy can cover ransom payments, lost revenue due to the interruption of business, and rebuilding. The most common type of first-party coverage is Data Breach Insurance, which is a type of policy that specifically focuses on exposure of private data from your company.
- Liability Coverage: This type of coverage covers legal fees and judgments in the event customers sue your business after a breach. It can also help cover regulatory costs from the government in the aftermath of a breach, like fines and investigations. A liability policy can also cover costs associated with notifying affected customers and helping them to protect themselves from fraud that may happen as a result of an attack.
Generally speaking, Cyber Security policies don’t cover damage to computer hardware that may happen as a result of an attack, which may be covered by Commercial Property Insurance. Cyber policies also generally don’t cover self-inflicted or criminal acts on the policyholder’s part in relation to a breach, and many policies don’t cover loss of intellectual property from an attack.
While the costs of preventative measures like cybersecurity training for your staff and shoring up computer hardware or software are important, they often haven’t been covered by Cyber Security policies, some insurers are starting to do so. Talk to our agents today to learn more about what coverage is available to protect your business against cyber attacks.
What Does Cyber Security Insurance Cost?
Premiums for Cyber Security Insurance depend on many factors, like the amount of coverage you’re purchasing, the types and amount of data your business keeps on hand that could potentially be at risk, and whether or not you’ve suffered a breach in the past. Some insurers will consider the level of preventative measures you have in place as well. If you’re ready to learn more about the costs and the types of Cyber Security insurance that are out there, our agents are ready to help.