If you are wondering whether your small business needs cyber insurance, the answer is yes! This is because the aftermath of a data breach or cyberattack is always devastating and sometimes out of control.
In recent times, cyberattacks and data breaches have increased tremendously and have affected quite a number of businesses, both large and small.
Cyberattacks are not just affecting large businesses; small businesses are also being targeted. If you run a business that requires an online presence to promote its visibility, then you should consider getting cyber insurance.
As a business owner, it is your responsibility for the day-to-day activities of your business; hence, you need to up your game and protect your business from certain types of risk.
Now that there has been an increase in the ratio of cyberattacks in the last few months, it is a wise decision to buy cyber liability insurance for your business, regardless of how small it is.
What is Cyber Insurance?
Cyber insurance, also known as cyber liability insurance, is typically designed to protect businesses and companies in the event of a cyberattack from unknown sources.
This type of insurance covers legal and financial liability stemming from a cyber incident. For instance, if a client’s sensitive information gets stolen, your cyber insurance policy can help cover the cost of recovering the data and fixing the damage it caused.
What Does Cyber Insurance Cover?
Cyber insurance covers a vast array of expenses associated with cyberattacks, such as:
- Recovering and restoring lost data.
- Repair of devices.
- Cost of repairing the reputation of the company.
- Computer forensics.
- Civil damages as a result of being sued.
- Credit monitoring services.
- Lost funds.
Nevertheless, it is important to note that the recovering and restoration coverage only applies to cyber-attacks relating to hacking, malware, and phishing attacks.
To get a better understanding of what is covered by your cyber insurance policy, you can reach out to your insurance company for clarity.
What is Not Covered By Cyber Insurance?
Although cyber insurance covers a wide range of fees and expenses related to cyber incidents, there are limits to what the policy covers. Cyber insurance does not cover:
- Expenses related to boosting cyber security after a cyberattack.
- Financial compensation for future profits lost due to a cyber incident.
- Lawsuits based on possible cyber threats that existed before the breach.
- Losses resulting from intellectual theft.
- Cyberattacks caused by foreign criminals.
How Much Does Cyber Insurance Cost?
The cost of cyber insurance varies across insurance companies and depends on several factors. Before issuing a cyber insurance policy, most insurance companies weigh certain factors in order to determine how much you’ll pay for the premiums. Factors that can potentially influence the cost of cyber insurance include:
- Type of business.
- Business size.
- Annual revenue.
- Level of coverage and deductible.
- Security of your business.
- Amount of sensitive data.
The most important thing to note is that the price varies, and the best way to find an affordable option is by shopping around and comparing quotes. This will enable you to settle for an insurance company that best suits your needs and budget.
Taking the Step of Protecting Your Business With Cyber Insurance
If you have finally realized the importance of having cyber insurance to help mitigate the risk of cyberattacks, there are certain things you need to consider. Now that you are on the lookout for an insurance company that offers this coverage, highlighted below are some of the things you should reflect on:
Evaluate your current business policy: If you have an existing business policy, you should check whether it provides coverage for cyberattacks or data breaches. Most business policies do not have sufficient coverage for cyberattacks, which means you are responsible for the expenses in the event of a cyber incident.
Reduce the risk you are exposed to: peradventure, you realize that your business is exposed to a certain type of risk; the ideal thing to do is to find ways to prevent it from causing harm to your business. Be deliberate about eliminating files and unnecessary information before purchasing cyber insurance.
Understand the amount of sensitive data your business stores. Once you are able to evaluate how much information you manage and store on your devices, you will be able to know the right amount of cyber insurance coverage needed for your business.
All in all, ensure you read the fine print of your policy carefully so you can get an idea of what it covers, including its limitations.
