While modern technology offers astounding options for expanded data storage, increased customer
connection, and visibility with internet users all over the world, these conveniences come with
potential risks.
Hackers and other bad actors often exploit the cyber realm to steal valuable data from your company
or even lock you out of your own systems.
What’s more, if a data breach compromises sensitive customer information, you can open yourself up
to costly lawsuits.
The average data breach costs 3.86 million dollars, but attacks can be even more expensive
depending on the amount of data compromised, the seriousness of the breach, and the number of
lawsuits filed.
It’s important to mitigate the effects of a cyber attack. That’s why cyber insurance is essential.
A good cyber insurance policy can cover the majority of losses associated with a hack, especially
costs coming from customer lawsuits. However, it’s important to pick the right insurance policy—one
that covers all the bases.
In this article, we’re sharing our checklist of the most important things to look for when choosing
a cyber insurance policy for your business.
When you’re choosing a cyber insurance policy, it’s important to balance two factors. You should make sure your policy covers any big costs you might incur, but you should avoid going
overboard on an all-inclusive policy that covers more than you need and exceeds your budget.
When it comes to common coverage options, there are two main types to look for: first-party coverage
and third-party coverage.
First-party coverage addresses the immediate costs of a cyberattack: restoring lost data,
ransomware costs, and initial response expenses.
Third-party coverage deals with expenses that might come later, from customer lawsuits or
government fines. Both types of coverage are important, and our checklist includes elements for both
types of coverage.
The items on this list are all essential areas to review, but use our suggestions to tailor a
policy to your company’s unique needs and level of risk.
Below is our cyber insurance coverage checklist for 2022:
When a ransomware attack occurs, a hacker gets access to your system and locks you out of essential
documents and files until you pay a fee. Protect yourself against the high costs of a ransomware
attack by getting an insurance policy that covers this possibility.
Data restoration coverage
When you lose information and data to a cyber attack, you need to get it back.
Sometimes this process involves retrieving information from backup storage, and sometimes it’s more
costly and complex. Either way, you want an insurance policy that covers the costs of getting your
data back.
When a breach is discovered, you need it to be fixed quickly. This can be costly, especially if systems were compromised in some way by the attack. A good cyber
insurance policy will help cover initial response costs.
Legal expenses
In the instance of a data breach that exposes customer information, you might find yourself
defending against lawsuits in court. You’ll want an insurance policy that covers your legal fees,
such as the cost of hiring a lawyer.
If a breach occurs and you’re found in violation of certain privacy and cybersecurity laws, you can
be slapped with hefty government fines.
If you deal with medical records, for instance, you can be fined $50-50,000 per breached record
under HIPAA, and the Gramm-Leach-Bliley Act (GLBA), regulating financial services, allows the
government to fine you up to $100,000 for failing to follow information protection practices.
Protect yourself from costly fines by getting an insurance policy that covers governmental fees.
The items above are a few important elements of our cyber insurance coverage checklist. When you’re
evaluating your company’s insurance needs, make sure you take these into consideration to purchase
the best protection for your business.
Cyber insurance is a broad field, and like other types of insurance, not all policies are the same. Some cyber insurance policies are limited in scope and only cover legal costs and fines associated
with a data breach, while others focus on mitigating the damages caused by lost data or ransomware
attacks.
When you’re looking for a policy, decide ahead of time what kind of coverage you need for your
business, and choose an affordable policy that doesn’t add expensive extras that go beyond the scope
of your needs!
As a small business, it can be easy to dismiss the risk of cybercrime as the realm of multi-million
dollar corporations. However, even small and medium-sized businesses are vulnerable.
More than two-thirds of small businesses experienced a cyberattack, according to a 2018 report,
and that percentage is likely to increase in coming years.
Moreover, cyberattacks can be especially dangerous for small businesses, which may not have the
resources to pay the devastating costs associated with a breach. A Ponemon Institute report found
that 60 percent of small businesses are at risk of going bankrupt when faced with a breach.
It’s just as important to protect your small business against the threat of cybercrime.
However, cyber insurance coverage can be expensive, so don’t feel overwhelmed or pressured into
buying an expensive policy far beyond your budget and your needs.
Evaluate the type of data you have and what costs you’re most likely to incur in case of a breach.
If you don’t store much sensitive customer data, and you’re more worried about losing access to
systems or important company documents, you should focus on robust first-party insurance coverage.
If lawsuits are a real threat in your industry, make sure your insurance policy has good legal
protection and covers any fees you might incur.
The bottom line? As a small business, it’s important to identify your most pressing security issues
and find an affordable policy that focuses on the risks that are most realistic for your business.
Cyber insurance matters for your business. With security breaches on the rise and company costs
increasing, it’s important that you protect yourself from dangerous threats.
Our cyber insurance coverage checklist can help you determine the most important areas of coverage
for your business and choose a tailored policy that protects you and the data that matters most.
Do you need help navigating the world of cyber security? We are here to help!
Contact Expedient Technology Solutions today to see how we can help protect your data and
manage your security.