Hacks, breaches, and network outages present more than just technical issues, and these potential consequences can lead business owners to adopt more sensible approaches to preventative measures and response plan security. Preventative measures help secure network defenses and employ security best practices, like cybersecurity insurance as part of your businesses response plan is a necessary safety net to ensure your businesses recovery after a cyber attack.
Cybersecurity insurance- sometimes mentioned as cyber liability or data-breach liability insurance- is standalone coverage. It’s designed to help companies recover data loss from a security breach, network outage or service interruption. Cybersecurity policies are tailormade and vary depending on insurers because of prices and exclusions and are important to building a complete strategy for risk management and response.
Should You Purchase Cybersecurity Insurance
No business is exempt from network outages or data breaches of any kind- small businesses and large enterprises alike. The impacts from financial loss, lost business opportunities, damaged reputation and customer uproar can be devasting, and can potentially lead to loss of employment, as Target’s former CEO discovered in 2014.
With so many extreme repercussions, cybersecurity insurance may be the knowledgeable thing to do for your business. It alleviates many of the costs and time put in investigating and resolving security mishaps and promptly assists your business with returning to normal operations.
What Types of Coverage Are Available
Cybersecurity insurance comes in two types: first party and third party. Most insurers offer policies that combine features of both types, but you find few that don’t. Business should be thorough when reviewing their cybersecurity policy to be aware of what is covered in the event of a security breach- most carriers will also include provisions and rejections into first or third-party policies.
A cybersecurity policy on first-party coverage will protect against:
- Losses suffered by the insured
- Damaged or lost digital assets, such as data or software
- Cyber extortion if the hacker holds insured’s data for ransom
- Money stolen through and electronic crime
- Lost business opportunities or increased operational costs due to a disruption of the insured’s computer
Cybersecurity policies on third-party coverage are typically geared towards third-party companies who manage networks, software or systems that hold compromised data.
- Third-party coverage will cover the cost associated with:
- Security breaches of employee confidentiality
- Lost customer data and information
- Customer notification after a security breach
- Public relations efforts and battling defamation and intellectual property violations
What Kind of Cybersecurity Insurance Do You Need
The most effective way to determine what kind of cybersecurity insurance your business needs is to complete a risk assessment and impact analysis. Businesses should review all their assets, including financial and customer data and intellectual property, then determine them as a high or low risk. Discover the main points of vulnerability during this process. Hackers are relentless and will exploit vulnerabilities in a system to steal a company’s physical assets- the 2016 attack on Swift, once renowned for its highly secure financial message systems showed that cybercriminals will stop at nothing.
Business owners should visit with their legal team and other department heads for insight on the ramifications of a data breach and pinpoint which assets demand safeguarding when developing a risk-management strategy. Cybersecurity is everyone's job and establishing a safety net to preserve your business from a cyber attack can prevent repercussions, and bottomline.