What You Need To Know About Cyber Security Insurance

Cybersecurity breaches are already expected for most businesses. Companies lose approximately $490 billion every year due to data theft – more than what’s spent on catastrophes such as hurricanes. The damage to your company reputation, legal liability, and the likes, may put you out of business.

Cybersecurity insurance is a relatively young area of insurance already worth $3.5 billion. Taking the smart step of purchasing a policy to protect your business may be one of the best investments you will ever make in your company.

Hacks can be expensive. It can cost a company about $1.3 billion. Clients records cost approximately $200, twice as much for medical records. The costs comprise recovery efforts, legal fees, foregone profits, and reputational damage. But cybersecurity insurance can’t be purchased from anybody. Also, good practices and strict security should be implemented along with it. Your business’ constant vigilance is what keeps it going.

Cyber Security Policies

Cybersecurity policies are highly customizable and complex. There are two kinds of them: first-party and third-party. First-party covers the costs linked to a hack – from telling your clients to getting back on your feet.  Third-party cybersecurity covers the risks when your business is responsible for the breach.

The premiums, as well as payouts, are based on your company’s industry exposures, data risks, financial strengths, and practices. You should shop for a policy based on your needs rather than on costs. The cost of insurance generally aligns with your risk. In other words, if you want to pay less, then get safer.

Assessing Cyber Security Risk

This remains one of the biggest challenges of cybersecurity insurance. It’s difficult assessing data security risk because is so unpredictable. Cybercrime hasn’t existed for too long, but the impact of a cyber attack can be devastating. Until more data is gathered, insurers may be conservative and at times may overcharge you.

Your Older Insurer May Not Cover Cyber Insurance

Chances are your general liability or property insurance doesn’t include cybersecurity risk coverage. These policies refer to the physical property rather than data or electronic systems. Unfortunately, many business owners don’t know this and may even ignore whether data has been stolen from them. Protect your business from the high costs of a hack. Request a cybersecurity insurance quote here.


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