Bear with us here, because we’re going to take a moment to talk about a subject that isn’t particularly fun.
Ugggghhhh, right? Unless you are in the insurance business (in which case, sorry), there is nothing particularly enjoyable about insurance. It costs money, and if you ever use it, it means something bad has happened. Nope, no fun at all.
Insurance IS important though, and it can provide some peace of mind that if the worst does occur, you won’t be financially ruined. Chances are you already have a lot of insurance in your personal and professional life: auto, health, life, liability, the list goes on. But now it’s getting increasingly important to add cyber insurance to that list.
Here’s what you need to know about this new and evolving area of the insurance industry.
What is cyber insurance?
Sometimes also called cyber liability insurance, this type of insurance covers or mitigates the costs for a business that has been the victim of a cyber attack, whether it’s ransomware, a phishing scam, a virus, or some other form of hack.
If you store important or sensitive data on your network, a hard drive, or in the cloud, then the short answer is, yes, you probably do. Or if a cyber attack on your business could lead to a significant loss in productivity and income, then the answer, again, is yes.
Though there might be some basic cyber coverage in your liability insurance, cyber insurance will offer you much more protection. It’s especially important if you store any personally identifiable information about your employees or customers, such as names, social security numbers, credit card or bank data, email addresses, or birthdays. Any of that data could be used by a hacker to target an individual, who could in turn sue you for the security breach. Many cyber insurance policies can help cover the costs of settling that litigation.
What does cyber insurance cover?
Even if you aren’t targeted by a lawsuit, you’ll still have extensive costs in the wake of a hack. Cyber insurance covers a variety of these, including:
- The recovery of your system or data;
- Notification of customers or clients of the security breach that may affect them;
- The costs of business loss due to downtime or suspended operations;
- A forensic investigation into your hack to prevent future attacks.
All of these costs, and others, are typically covered by a cyber insurance policy.
Costs vary depending on the size of your business—and the size of your policy. Some policies may cost as little as a few hundred dollars a year, while others are in the tens of thousands.
Aside from your business’s size and coverage needs, your costs can be affected by some other factors. One is location. If, for example, you store your data on a European server, it may be subject to foreign laws regarding data security and insurance, such as the recently passed EU Cybersecurity Act. So, it’s important that you have a full understanding of your network and data storage setup before you begin exploring your cyber insurance options.
Another key factor in your insurance costs is your cyber security. Just as many health insurance policies go up in cost if you have too many risk factors, your cyber insurance costs will increase astronomically if you don’t have proper security measures in place. If, on the other hand, you have robust security—including precautions like multi-factor login credentials, antivirus software, firewalls, and VPN usage for remote access—your premiums will likely be much lower.
Furthermore, if you fail to take preventative measures to protect your network and data, your cyber insurance claim—no matter how much you pay for it—may well be denied. Some cyber insurance providers won’t even offer you a policy if you don’t have proper security in place.
Yikes! I guess I need to beef up my cyber security, too.
You sure do. Fortunately, that’s where Beacon IT Services (BITS) comes in.
We offer extensive cyber security and threat protection services to our clients in addition to cloud integrations, data backup, and other key managed services.
Contact us today to begin exploring how we can make your business more secure. Because after all, an insurance policy is the last line of defense for protecting your business, and with BITS providing security, you reduce the potential of having to put it to use.