Like it or not, the world gets more and more digitally interconnected. And to paraphrase the saying – “With Internet’s great power comes great responsibility”. Cyber security breaches and data leaks have always been a threat. Even a while ago. However, now, such incidents can (and most of the times do) end up costing companies millions of dollars.
So, the concept of cyber security insurance gets more and more viable with each piece of information companies upload to the World Wide Web. Because data breaches can lead to losses and it is not just a matter of finances. Losing money over a cyber-attack is usually accompanied by hurt reputation and business disruption. Exactly the three things no CEO wants to hear.
So, what can a company do to protect itself against cyber-attacks and data breaches? Well, the first line of defense is proper cyber security defense systems. Ensure all the data is properly protected so there won’t be any security breaches in the first place. The second line is cyber security insurance policy, because data breaches happen even if all the security protocols are complied with.
But let’s start from the beginning.
What exactly is cyber security insurance?
As the name suggests, such insurance covers your company’s liability in case of damaging cyber-attacks and data leaks. Because, let’s face it, keeping customer and employee personal information on the cloud is easier, cheaper and saves you a lot of room. This type of information is considered sensitive. So, if such sensitive information gets disclosed or ends up in the hands of third, unauthorized, party, your customers or employees may sue your company over this. This is where the cyber security insurance comes through. The cyber liability insurance coverage is specifically designed to help businesses recover after cyber-related security breach, by offsetting the costs for legal fees and settlement involved with the incident.
What does the cyber security insurance commonly cover?
First-party coverage
Covers your business’ liability in case of data breach. It can include things like business interruption coverage, investigative services and data recovery etc.
Third-party coverage
Covers your business’ liability if responsible for the management and the safety of the systems or network that was breached.
Does my company need it?
The short version of the answer is – if your business uses or depends on computerized data – yes, yes it does need such insurance. Especially if your company is large. But small and medium-sized businesses are also vulnerable. Over $117,000 was the average cost of data breach to them and they represent 58% of all malware victims. Business that should particularly consider cyber security insurance include:
- Marketing companies;
- Online stores;
- Medical practices;
- Municipalities;
- IT and tech companies;
- Restaurants and more.
Mainly, businesses that collect and store online personal information including:
- Social Security numbers;
- Personal information data;
- Credit card data;
- Driver’s license numbers;
- Healthcare data.
Protecting your business with cyber security insurance
Above all, the cyber security insurance is not a “Get out of jail free” card. It doesn’t protect your business FROM cyber-attacks. It can help your organization mitigate risk exposure and with the recovery after the attack but it doesn’t cover indirect losses caused by data breach, such as loss of intellectual property or brand damage.
In order to provide maximum coverage against cyber threats, you should consult with a professional and asses your organization’s levels of cyber risk. So, what expenses do you want covered by your insurance in the event of cyber damage? Our experts can help you get the coverage suiting your company’s needs.
Contact Argo Insurance to get expert advice and discuss all the options that we have for your insurance. Also, you can call us now for a quote or compare offers from multiple quality companies right here.