What is cyber security insurance?
Computer systems and softwares are a vital part of most businesses. However, cyber attacks and data breaches are becoming way too common. In fact, they are so common, they shouldn’t be neglected. Nearly 55% of all small businesses have experienced data breach at least once.
The cyber security insurance covers your business’ liability for data breach and damage from cyber threats. Especially when sensitive customer information is involved, because the loss of such sensitive data can result in expensive liability and recovery costs.
The policy covers legal fees and settlement costs in case of data breach. But it doesn’t cover indirect losses caused by data breach, such as loss of intellectual property or brand damage.
Do I need cyber security insurance?
In the near past, cyber insurance was mainly needed by the healthcare and banking industry, but nowadays more and more small businesses choose to store customer information.
If your business stores sensitive customer data, cyber insurance is a must. Such data includes: Social Security numbers, credit card numbers, medical records, names, addresses, driver’s license numbers etc.
Who is it suitable for?
For example, some of the businesses that should consider cyber security insurance include:
- Marketing companies;
- Online stores;
- Restaurants;
- Hotels and spas;
- Consultants;
- Municipalities;
- School districts;
- Medical practices.
Cyber security insurance coverages
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.
How much does it cost?
The cost of the insurance depends mostly on your business’ levels of cyber risk . Businesses with higher exposure to cyber risk and higher coverage needs can expect to pay more than businesses with lower exposure.
All content is for general information purposes and does not constitute insurance or legal advice.
