What is cyber insurance?
Cyber insurance gives your business the financial protection you need if you fall victim to a cyber attack or a data breach. Most businesses capture large amounts of data of their clients, their employees and other key relationships. What if your business gets hacked or your systems fail, exposing your business contacts and critical data? It’s your responsibility to safeguard that information and if you are unable to do so, it’s on you to make it right for those contacts.
What does a cyber insurance policy cover?
Cyber insurance policies can cover you for business interruption, forensic support, legal support and cyber extortion defense.
If your business suffers a cyber attack, it can bring your operations to a halt. Cyber liability insurance may cover the loss of income during your downtime to cover expenses such as employees and operating expenses. In addition, the costs of your business operations may be inflated after a cyber attack and that increase may be covered as well.
So you had a cyber attack and worked hard to get your information back. What now? You will want to know what happened, the extent of the breach and why/how it happened in order to avoid going through an attack again. With cyber liability coverage, your business may have resources available to answer those questions and provide support from cyber specialists.
Depending on the severity of the breach, you may have legal action taken against your business which can be very costly. Cyber liability coverage can help your business afford proper legal coverage after an attack.
CYBER EXTORTION DEFENSE
When cyber attacks happen, hackers may use extortion through ransomware and demand payment in order to return your data. This usually comes with a very large fee, so would you be able to buy back your information if it happened to you? In the unfortunate event that you are being extorted, cyber liability can help you recoup the losses.
Why do we need cyber insurance?
With data and information often being valued higher than physical assets, it’s important for your business and your clients to have the proper measures in place to keep information safe as well as coverage in the event that a data breach attack is targeted at you. Your commercial general liability policy may not protect your organization from a loss related to data breaches. A cyber insurance policy will supplement your commercial insurance program. While some insurance policies may contain a limit of insurance to provide financial protection from a cyber attack, this is in most cases quite limited. It’s important to review with your MIG insurance broker to make sure you have the right amount of coverage for your specific situation.
Do small businesses need cyber liability insurance?
You might wonder if cyber liability insurance for small business is necessary. Every SME (small to medium enterprise) has exposure to cyber risks, just as any large organization may have. The cost to overcome a cyber crime event will be proportionally as relevant to the well being of an SME. Can your business afford to weather the costs associated with overcoming a cyber attack?
Despite all the high profile news regarding the prevalence of cyber crime, only about half of all small businesses allocate budget to mitigating the risk of a cyber attack. Small businesses may be less likely to ensure regular updates to software are done on a timely basis as they don’t often have the internal IT teams to keep on top of their technology ecosystems to the same degree as larger organizations. Many businesses of every size are employing SaaS (software as a service) platforms rather than in house solutions for technology. This means more data is flowing between platforms. And only about one quarter of small businesses have considered their need for cyber liability insurance.
How does cyber insurance work?
Should your business fall victim to a cyber attack or data breach, it will be responsible for all costs associated with mitigating the effects. Without proper cyber liability insurance coverage, these costs can become devastating to your operations. There are compliances that must be met, and to be on side with this, there are significant costs you would need to cover. These costs include communications to your entire customer base, any court fees and settlements from legal action, data asset losses (you may need to rebuild all your data files), regulatory investigations and the cost of lost business. As you can imagine, this will add up quickly and can be devastating to the financial viability of a business. Cyber insurance will offset the financial burden of the fallout from an attack.
How much does cyber liability insurance cost?
For a small to medium sized business, you can expect the cost of cyber liability insurance to be anywhere from $80 to $650 per month depending on your business size, use of data, risk mitigation processes and many other variables.
Contact us to find out more about Cyber Liability Insurance Coverage.