Cyber insurance is a growing asset for many business owners. In a connected world, it is easy to expose customer or company data to would-be thieves. This is why business insurance is increasingly including cyber liability insurance. Knowing the risks and understanding your exposure is important. Your agent can offer specifics about your type of business. However, there are some key details you should know about when getting this coverage.
Know the Risks Of Cyber Theft
Many businesses, especially smaller companies, do not recognize the risks for cyber theft. Yet, this type of risk is growing today. Statista states that, in the United States, $21.22 million dollars in claims provided coverage for cyber theft in 2017. Your risks are many:
- Someone can break into your company’s proprietary information and copy your product.
- Your employee’s personal data could suffer a leak, exposing them to theft.
- The identity and personal information of your customers suffers access from a third party. This puts them at risk of identity theft.
- You face regulatory fines for not protecting your employees and customers.
When this occurs, you could face lawsuits and class action lawsuits. Many companies find paying for the expenses just to notify those who may have some type of identity leak is expensive. And, there are risks associated with backing up, restoring, and protecting your systems again.
What Is Cyber Insurance Protecting From?
Cyber insurance provides financial protection to companies for loss or corruption of data. It provides liability insurance to cover customer or third-party losses. It can also provide business interruption insurance to cut costs if your company cannot operate for a period. Most policies provide identity theft monitoring. This can help your customers, employees, or others monitor their identity to minimize risks. It can even include cyber extortion protection and reputation recovery.
How Can You Minimize Cyber Theft Risks?
You can work to strengthen your protections. For example, having proper software and hardware for detecting and blocking such threats is essential. You also may wish to switch to cloud computing to reduce risks. Many companies, even smaller businesses, are moving towards working with IT professionals in-house to reduce risks.
You have business insurance to help you when this occurs. However, having a specialized policy is nearly always necessary. Work with your agent to learn more about this need. Cyber insurance additions on your current policy can give you peace of mind. And, it helps you protect your business, customers, and employees.
FAQ’s About Cyber Insurance Risks and Statistics
What is cyber insurance?
Cyber insurance is a type of insurance that protects businesses and individuals from internet-based risks, such as data breaches, cyber attacks, and other digital threats.
What does cyber insurance cover?
Cyber insurance policies can vary, but typically cover costs related to data breaches, cyber attacks, and other digital threats, including legal fees, public relations expenses, and loss of income due to business interruption.
Why do businesses need cyber insurance?
Businesses need cyber insurance because cyber attacks and data breaches are becoming increasingly common and can be very costly. Cyber insurance can help protect a business’s financial stability and reputation in the event of a cyber incident.
What are some common cyber insurance exclusions?
Common cyber insurance exclusions include losses resulting from physical damage, intentional acts, and acts of war or terrorism.
How much does cyber insurance cost?
The cost of cyber insurance can vary depending on a number of factors, including the size and type of business, the level of coverage needed, and the business’s history of cyber incidents.
What are some common cyber risks that businesses face?
Common cyber risks that businesses face include phishing attacks, malware infections, ransomware attacks, and data breaches.
How can businesses mitigate cyber risks?
Businesses can mitigate cyber risks by implementing strong cybersecurity policies and procedures, training employees on cybersecurity best practices, and regularly updating and patching software and systems.
What should businesses do in the event of a cyber incident?
In the event of a cyber incident, businesses should immediately notify their cyber insurance provider and follow their incident response plan, which should include steps such as isolating affected systems, preserving evidence, and notifying customers or clients as necessary.
What are some emerging cyber risks that businesses should be aware of?
Emerging cyber risks that businesses should be aware of include the Internet of Things (IoT), cloud computing, and artificial intelligence (AI), which all present new opportunities for cyber attacks.
How can businesses stay up-to-date on cyber risks and insurance trends?
Businesses can stay up-to-date on cyber risks and insurance trends by regularly reading industry publications, attending conferences and webinars, and working with a knowledgeable cyber insurance broker or agent.
What factors influence cyber insurance premiums?
Cyber insurance premiums are determined based on several factors, including the size and type of business, the level of security measures in place, and the amount of coverage needed. Other factors that may influence premiums include the industry sector, the number of employees, and the company’s history of cyber incidents.
How do insurance companies assess cyber risks and determine coverage limits?
Insurance companies assess cyber risks by evaluating a company’s security posture, including their network security, data protection, and incident response plans. They also consider the potential financial impact of a cyber incident on the company, including the cost of recovery, legal fees, and regulatory fines. Coverage limits are determined based on the level of risk and the amount of coverage requested by the company.