Cyber Insurance Risks and Statistics
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
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 These 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.