Cyber insurance policies are a relatively new addition to business insurance, and for many small businesses, they remain a mystery. What do they cover? How much do they cost? How can you ensure you’re getting the most out of your policy? This blog post will answer some questions and highlight ten ways to protect your business from cyber-attacks. Stay safe out there!
What is cyber insurance, and why do you need it?
Cyber insurance is a type of insurance that helps protect businesses from the financial losses that can result from cyber-attacks. These attacks include hacking, data breaches, phishing scams, and denial of service attacks.
According to a recent study, the average cost of a data breach is now over $4 million, and hackers are increasingly targeting smaller businesses. 43% of cyber-attacks target small businesses.
If your business suffers a data breach, you could face several costly expenses, including hiring a forensic expert to investigate the breach, notifying customers, and offering them credit monitoring services. You may also be liable for any financial losses your customers suffer due to the breach.
Cyber insurance can help cover the costs associated with these types of attacks, and it can also provide legal assistance if you are sued as a result of a data breach.
What are the benefits of having cyber insurance?
There are many benefits to having cyber insurance, including:
1. Financial protection in the event of a data breach or cyber-attack
2. Coverage for the costs of hiring a forensic investigator
3. Coverage for the costs of notifying customers
4. Coverage for credit monitoring services
5. Legal assistance if you are sued as a result of a data breach
6. Access to a team of cyber security experts
7. Discounts on cyber security products and services
8. A lower deductible if you have strong cyber security measures in place
9. The ability to customize your policy to fit your specific needs
10. The peace of mind that comes with knowing you’re protected
If you’re still unsure if cyber insurance is right for your business, we recommend talking to your insurance broker or agent. They can help you understand the coverage and determine if it fits your business well.
Who is Cyber Insurance For?
As digital attacks become more common, businesses of all sizes are starting to purchase cyber liability insurance. In fact, according to a recent study, the number of businesses buying cyber insurance has increased by over 20% in the past year alone.
While any business can be the target of a cyber-attack, some are more at risk than others. Businesses that store sensitive customer data, such as credit card numbers or health information, are more likely to be targeted by hackers.
Retailers, restaurants, and hotels are also at a higher risk, as they typically have more point-of-sale systems that can be hacked. If you’re not sure if your business needs cyber insurance, we recommend talking to your insurance broker or agent.
Types of Cyber Insurance Policies
There are three distinct insuring agreements available in most cyber insurance policies:
1. First-party coverage: This agreement covers a business’s direct loss from a cyber-attack. This can include data recovery, business interruption, and crisis management expenses.
2. Third-party coverage: This agreement covers the legal liability a business faces due to a cyber-attack. This can include expenses such as litigation, settlements, and judgments.
3. Network security and privacy coverage: This agreement covers the costs of investigating and responding to a data breach and the costs of notifying affected individuals.
Most policies will offer some combination of these three insuring agreements. Cyber coverage is a rapidly evolving field, and choosing a policy that meets your specific needs is important.
Social Engineering Coverage
Social engineering is a type of cybercrime that involves tricking people into giving up sensitive information or money. It can take many forms, including phishing, CEO fraud, and romance scams.
In the past year, there has been a surge in social engineering attacks, with hackers increasingly targeting small businesses. These attacks can be costly, often resulting in data breaches or financial losses.
Cyber liability insurance typically offers social engineering coverage, which can help protect your business if you are the victim of one of these cyber events.
Errors and Omissions Insurance
Errors and Omissions insurance (E&O) is a third-party policy protecting against negligence claims. This can be helpful for businesses that provide professional services, like consultants or financial advisors.
Privacy Insurance
Privacy insurance is another type of third-party policy that can be used to protect against privacy violations. This can include identity theft, data breaches, and cyberstalking.
Network Security and Information Insurance
This policy covers the costs of restoring or repairing damaged computer systems and networks. It can also cover the costs of investigating and notifying customers of a data breach.
Businesses that rely heavily on technology or that store sensitive customer data are at a higher risk of cyber-attacks. As a result, they may need this type of coverage to protect themselves from financial damages.
Media Liability Insurance
Media liability insurance covers third-party claims of defamation, copyright infringement, and invasion of privacy. This can be helpful for businesses that produce content, like bloggers or bloggers.
Reputational Harm Insurance
Reputational harm insurance protects against the cost of repairing damage to your business’s reputation. This can include expenses like crisis management, public relations, and legal fees.
This type of coverage is important for businesses that rely on their reputation to attract customers. For example, a hotel chain or a luxury retailer might need this type of coverage to protect their brand in the event of a data breach.
Business Interruption Insurance
Business interruption insurance can help cover the lost income and expenses incurred if your business is forced to shut down due to a cyber-attack. This can include the cost of a temporary relocation, employee salaries, and lost customers.
Crisis Management Insurance
This type of insurance covers the costs of managing a public relations crisis that results from a cyber-attack. It can help pay for damage control, communications experts, and legal fees.
Bricking Insurance
Bricking insurance is a type of first-party coverage that protects against the cost of repairing or replacing damaged equipment. This can be caused by malware, hardware failures, or power surges.
This type of coverage is important for businesses that rely on technology to operate. For example, a manufacturing company might need this type of insurance to protect their machinery from damage caused by a cyber-attack.
Which policy is right for your business depends on several factors, including the type of business you have and the level of risk you’re comfortable with.
What’s not covered by cyber insurance
While cyber insurance can help protect your business from many attacks, there are some exclusions to be aware of. These include:
1. Intentional acts committed by the policyholder or their employees
2. Acts of war or terrorism
3. Nuclear accidents
4. Employee dishonesty
5. Property damage caused by cyber-attacks
Some policies exclude certain data types, such as personal health information or credit card numbers. Be sure to read the fine print of your policy, so you know what’s covered and what’s not.
How Much Does Cyber Insurance Cost?
By examining the types of insurance, and what they cover, you’ll be better informed about the cost of cyber insurance. PII and PHI-sensitive data policies will cost more to insure than a general commercial policy.
The price of your policy will also depend on the deducible or the amount you’re willing to pay out-of-pocket in case of a claim. A higher deducible will result in a lower premium, while a lower deducible will result in a higher premium.
Some insurers also offer discounts for small business owners with strong cyber security measures, such as firewalls and data encryption.
The best way to get an accurate quote is to speak with your insurance broker or agent. They’ll be able to tailor a policy to fit your specific needs.
10 Ways to Protect Your Business from Cyberattacks
In addition to buying cyber insurance, you can take several other steps to protect your business from attacks.
1. Educate your employees about cyber security risks and best practices.
2. Implement multi-factor authentication for all accounts.
3. Use strong passwords and change them regularly.
4. Encrypt all data stored on your network.
5. Install firewalls and anti-malware software, and keep them up to date.
6. Regularly back up your data.
7. Monitor your network for unusual activity.
8. Keep your software and operating system up to date.
9. Invest in data loss prevention software.
10. Work with a cyber security expert to assess your risks and develop a mitigation plan.
How do you know if you’ve been hacked?
There are several signs that your business may have been hacked, including:
1. Unexplained charges on your credit card or bank account
2. Strange activity on your website or social media accounts
3. Suspicious email messages
4. Unusual network activity
5. Missing or corrupted files
6. unexplained increases in website traffic
7. pop-ups or new toolbars in your web browser
If you notice any of these signs, it’s important to act quickly. Contact your cyber insurance provider, and they can help you mitigate the damage and prevent further attacks. Some credit services will notify you if your information has been part of a security breach.
Cyber exposures are events that could happen to any business that collects, stores, or transmits data electronically. A cyber incident could result in the loss of this data and the interruption of your business operations. In addition to the cost of repairing the damage, you may also face expenses related to litigation and regulatory investigations due to the cyber event.
You should contact your insurance broker or agent immediately if you have experienced a network security failure, data breach, or other cyber incidents. They can help you determine if you have coverage and assist you in making a claim.
What should you do if you’ve been hacked?
There are several steps you. should take if your business has been hacked:
1. Notify your cyber insurance provider immediately.
2. Change all passwords and enable multi-factor authentication for all accounts.
3. Isolate the affected systems from your network to prevent the attack’s spread.
4. Run a virus scan on all computers and devices.
5. Restore any corrupted or missing files from backups.
6. Contact law enforcement if personal data has been stolen.
7. Notify your customers if their data has been compromised.
8. Implement new security measures to prevent future attacks.
9. Monitor your network for unusual activity going forward.
Cyber Liability Insurance vs. Data Breach Insurance
There are two main types of cyber insurance: cyber liability insurance and data breach insurance.
Cyber liability insurance covers the costs of damages caused by cyberattacks, such as data breaches, hacking, and denial of service attacks. It can also cover the costs of lawsuits related to these attacks.
Data breach insurance specifically covers the costs of data breaches, such as notification, credit monitoring, and identity theft protection services for affected individuals.
Some policies cover both types of risks, while others only cover one or the other. Be sure to read the fine print of your policy to see what’s included.
Cyber insurance is an important tool for businesses of all sizes in the fight against cyberattacks. By understanding the types of policies available and taking steps to improve your cyber security, you can protect your business from the financial devastation that can result from a successful attack.
Cyber insurance is not a cure-all, but it is an important part of a comprehensive security strategy. Used correctly, it can go a long way toward mitigating the risk of cyberattacks.
FAQ
Which businesses need cyber insurance?
Any business that stores or processes sensitive data, such as customer credit card information, medical records, or personally identifiable information, is at risk of a cyberattack.
Is cyber insurance worth it?
Yes. The cost of a successful cyberattack can be devastating, and cyber insurance can help protect your business from the financial ruin that can result.
How much does cyber insurance cost?
Cyber insurance costs vary depending on the size and type of business, the amount of coverage, and the deductible.
What does cyber insurance cover?
Cyber insurance policies vary, but they typically cover the costs of data breaches, cybercrime, and cyberterrorism.
What doesn’t cyber insurance cover?
Cyber insurance generally does not cover damages caused by employee error or negligence.
What is cyber extortion?
Cyber extortion is a cyberattack in which hackers threaten to release sensitive data or cripple your systems unless you pay them a ransom.
What is a ransomware attack?
A ransomware attack is a cyberattack in which hackers encrypt your data and demand a ransom to decrypt it.
What is a DDoS attack?
A DDoS attack is a denial of service attack in which hackers flood your systems with traffic, preventing legitimate users from accessing your data or services.
