With over 30,000 websites being hacked daily and 68% of companies experiencing at least one form of cyber attack, your cyber security is more important than ever. But along with implementing a cyber security policy and changes to how your business functions, you should consider cyber insurance.
There seems to be insurance for everything nowadays. But there is a reason why cyber liability insurance is something you should consider for your business IT. Once, general business insurance policies included some cyber coverage; however, it is a fraction of what cyber attacks will now cost your business.
Hopefully, your cyber security policy will protect your company from security breaches. However, cyber insurance can soften the blow to your company if an issue does arise. Read on to learn everything you need to know about cyber security insurance.
What Is Cyber Insurance?
Cyber insurance is a policy specifically designed to mitigate risks associated with a cyber security incident. Business IT services and security now face many types of risks, including ransomware attacks, data breaches, insider threats, and phishing. However, what they all have in common is they cost your business, which can lead to reputation damage and even bankruptcy.
If a cyber security incident occurs, you can face costs such as security investigations, extortion payments, compliance fines, data recovery, and lawsuits. Cyber insurance aims to reduce these financial risks and protect you from the significant losses cyber attacks can cause your business.
Who Needs Cyber Security Insurance?
No business is safe from the risk of cyber attacks. Over 40% of cyber attacks are aimed at small businesses. And on average, these attacks cost over $200,000, putting many companies out of business.
So, most businesses can benefit from cyber security insurance. Consider a cyber insurance policy if your company uses technology as part of its daily functioning. If you store sensitive information on computers, such as client data and payment information, then a policy will help protect you if an attack does occur.
If you’re unsure where to start in finding the best cyber insurance policy to fit your company’s needs, consult with an outsourced tech support company to help you find the best way to go.
What Is Included in a Cyber Insurance Policy?
Several factors will impact your cyber insurance policy coverage, such as the company and the policy’s price. You may have the choice to pick first-part coverage, third-party coverage, or both types of coverage for your business. First-party coverage refers to costs associated with company expenses, and third-party cost protection is a vendor, partner, or client sues you.
It is common for a cyber insurance policy to include:
- Coverage for costs incurred during a cyber security incident
- Communication cost coverage
- Coverage for fines, lawsuits, and other issues
- Coverage for IT security recovery and different response needs
There are a variety of costs associated with security breaches and incidents, which you may not consider until your company experiences one. For example, there may be communication needs, such as paying for staff to provide call-center support. You also may experience business downtime, which can incur huge losses.
Policies also consider legal coverage needs, such as payment for investigations. If your business resides in Southern California, hopefully, you have a Los Angeles IT support team to help with your response time so you can resume operations as soon as possible. However, a cyber security policy will prevent financial obstacles that prevent you from returning to your usual business operations.
What Doesn’t Cyber Insurance Cover?
It is essential to know that cyber insurance does not cover all costs associated with business IT issues. Some costs policies do not often cover include:
- Costs to upgrade IT security after the incident
- IP theft costs
- Long-term costs such as ongoing effects impacting profits
There are times when you may have long-term effects from cyber security incidents. For example, there is a risk of an advanced persistent threat (APT), which is a long-term campaign by a hacker. Usually, these types of threats are more complex and aim to infiltrate entire networks.
If you are unsure about your company’s coverage, consult with the cyber insurance firm directly. Most cyber insurance policies are sufficient for businesses, and policies are continuing to adapt to the changing cyber threats businesses face.
Cyber Insurance Policy Costs
It is important to note that cyber insurance costs continue to change. It is likely coverage will continue to increase in price due to the growing complexity of cyber security risks. Some cost factors include:
- Your industry
- The information on your systems
- Yearly revenues
- Cyber security measures you have in place
- Potential cyber security risks
When considering a cyber insurance policy cost, consider how much a data breach or IT incident will cost your company. Often the benefits outweigh the policy investment. There is a reason why the cyber insurance industry is projected to continue to grow, along with cyber security threats for businesses.
Benefits of Cyber Insurance
Most businesses will benefit from cyber insurance. After all, you are helping safeguard yourself and your business from potential cyber-attacks. While you cannot always protect yourself from cyber security breaches, you can control how you react.
Financial protection will help you react in the most responsive way to cyber security breaches. You will reduce reputation damage and other factors that could extend business downtime. Along with solid IT security support, an insurance policy can provide peace of mind for your business.
How to Find Cyber Security Insurance
There are many cyber insurance policies out there, so take the time to find a policy that suits your business needs. Check the company’s reputation and reviews to ensure their promises match their customer service. A reputable company should cover the key elements to protect your cyber security, such as legal expenses and liability costs.
Improve Your Cyber Security
Cyber insurance can help protect your business if there is a security compromise. However, you also need the proper IT support to prevent and manage cyber security threats for your business. One of the best ways of doing this is to partner with a local IT support team.
At Be Structured Technology Group, we believe in a business-first solutions approach. We want your business to be able to use technology as a tool to thrive, not just survive cyber security threats.
Are you interested in learning more about how we can support your business? Schedule a free IT consultation with us today.