Why Your Business Needs Cyber Insurance (and What to Look For)
We get it—nobody likes to think about the prospect of being impacted by a cybersecurity incident, but it’s like any other unpleasant event in that it is best to prepare for it. In fact, today’s businesses can invest in a cyber insurance policy to help prepare for such an eventuality.
Let’s go over some of the ins and outs of cyber insurance so that you are prepared to make the best choice of provider for your business.
First of All, What Does Cyber Insurance Cover?
Depending on your provider, there are different levels of coverage that your business has to consider.
First-Party Coverage Helps Cover Your Direct Losses
Suffering a data breach is an expensive circumstance. In addition to the costs required to recover any data still available, you also need to consider the cost associated with your business’ downtime and the fees incurred by any investigative services you enlist.
Third-Party Coverage Takes Care of Your Clients and Business Partners
Chances are that a data breach won’t just impact data that pertains to your business, potentially also harming the vendors you work with and the businesses you serve. You will be responsible for trying to make it right, which will be a costly endeavor.
It is also important to mention that cyber insurance covers more than just cyberattacks. While you should check any policy you plan to sign, it isn’t uncommon for a cyber insurance policy to cover damages from any form of business interruption—and to also cover hard copies of your data. Don’t be afraid to confirm what your policy covers before committing to an extended agreement.
What You Need to Determine as You Seek Out Cyber Insurance
During your search for a cyber insurance policy, it will be massively helpful to have a few facts and figures ready. This includes things like:
What is it your business will likely need? As we said before, there are various costs that different insurable events will incur. Let’s say that your business accepts card payments, and therefore needs to abide by the Payment Card Industry Data Security Standard—except somewhere along the way, someone fumbled the ball and left your business noncompliant and subject to fines. Cyber insurance may help cover these costs, and that’s just one example. It will be important for you to identify all potential needs like this and go about your search with them in mind.
How much can you invest into your cyber insurance? This is the big question when it comes to any budgetary determination, of course, but it’s particularly important to consider when the potential costs are so high. Will you be able to maintain the premium costs so that you are protected from the cost of a disaster? What level of deductible is acceptable for your needs?
Does the provider actually cover all situations you risk facing? Cybersecurity costs span a wide, wide range. Let’s say you were to suffer a breach…not only will you need to pay to have the root cause sniffed out and eliminated, but there are also the legal fees that will likely be involved, the costs associated with the notifications you legally need to make to your contacts, the PR expenses needed to preserve some aspect of your reputation, and the credit monitoring services for those affected that are all included under the umbrella of cybersecurity costs. In order to cover your bases, you need insurance that can be used to offset all of these costs.
We can help you determine what level of cyber insurance is appropriate for your business, helping you find a provider that helps you cover these needs. Find out more by calling 607.433.2200.