In today’s business world, advanced technology plays a key role in many aspects of a company’s success. However, it also poses serious risks that could result in millions of dollars lost from customers, vendors and others. To protect yourself and your company, you may need to purchase cyber insurance.
Cyber insurance is also known as cyber liability or cyber risk insurance. Its purpose is to provide coverage to a company in the case of a cyberattack or security breach. This coverage helps pay for the costs of recovery after one of these situations occur.
Some of the expenses incurred which may be covered with one of these policies include the following:
- Initial investigation – when a breach occurs, a forensics investigation is necessary to determine the cause, the repairs necessary and what prevention measures must be initiated going forward
- Loss to business – a policy will pay for losses to the business caused by business interruption
- Notifications – when a data breach occurs, the company must pay for the expense of notifying the customer or affected parties and for credit monitoring service whose private data has been accessed
- Lawsuits – a policy will pay for expenses regarding legal settlements and fines incurred due to the breach
- Extortion – a policy will pay for the expense of cyber extortion which may come from ransomware
If you’ve read the news reports when a data breach occurs, the costs are often in the millions of dollars, which could mean the end of business for a company that doesn’t have cyber insurance.
Cyber insurance continues to evolve as new risks are discovered and new technology is developed. When shopping for an insurance policy, you should make sure it includes all of the mentioned expenses and other costs. For instance, some insurance providers focus solely on covering expenses which result where the organization was the target. Others will cover all situations in which the organization is a victim of the attacks.
When shopping for cyber insurance, you will want to consider the level of risk for your company as well as the expenses which would be incurred in an event. You’ll also want to find out how to minimize your risk by installing or upgrading certain IT components.
Cyber insurance has become an essential part of many businesses’ coverage. If you are considering this type of policy for your company, contact us today to learn more.