What is Cyber Security Insurance?
Cyber security insurance protects businesses against targeted attacks and even the occasional misplaced laptop containing confidential material. If your company has employees or handles sensitive client information, you are vulnerable. The best cyber security strategy takes a three-pronged approach: prevent, detect and mitigate risk. This includes educating all levels of the organization about the importance of cyber security, facilitating ongoing monitoring of critical networks, reviewing response plans for emerging threats, and insuring against financial risk with a stand-alone cyber policy.
Today’s business technology opens up a world of possibilities but also raises some cyber security concerns. Threats of data breaches and computer hacks are real for all businesses, yet according to the 2018 Hiscox Cyber Readiness Report™, seven in ten businesses aren’t prepared for a cyber attack. While big firms incur the highest costs in the aggregate, the financial impact of cyber-attacks is disproportionately greater for small businesses.
With hackers becoming bolder and cyber attacks getting bigger and more frequent every year, business owners must take control of their computer security and protect themselves. Cyber security insurance provides small businesses the coverage they need to protect one of their most valuable assets – data.
You need cyber insurance if your business:
- Accepts credit cards or other digital payment types
- Uses computers and mobile devices
- Stores confidential customer information
- Keeps medical or financial data
What could Cyber Security Insurance cover?
A cyber security insurance policy is designed to cover privacy, data, and network exposures, to offer a computer security solution and give you peace of mind. Since cyber security is one of the fastest growing and changing risks in the world today, both cyber novices and smart and tech-savvy business owners can feel empowered with a policy that protects against hacks, data breaches, or other types of cyber security events.
The list of regulations and statutes continues to expand regarding the use and protection of cyber security information, as well as notification requirements in the event of a breach. As cyber exposures continue evolving, so will your need to ensure that your business is protected if a cyber attack occurs.
How could Cyber Security Insurance help after a cyberattack?
Immediate support:
- Data breach response: This covers your cost of computer forensics, the notification of those affected, call center support for those affected, identity protection services, and crisis management and public relations support.
- Cyber extortion: This covers the cost of expert assistance and ransom payment.
- Data recovery: This covers the cost to replace, restore, repair, or regain access to your data after a data breach, security failure or extortion threat.
Next few months:
- Business interruption: This is insurance for losses from total or partial interruption of your business as a result of a data breach, security failure or extortion threat.
- Dependent business interruption: This is insurance for losses sustained due to the total or partial interruption of your business as a result of a data breach, security failure or extortion threat at an outsourced business process or IT services supplier which you depend on to operate your business.
- System failure business interruption: This is insurance for losses sustained due to the total or partial interruption of your business as a result of any unintentional or unplanned outage of your computer system not caused by a data breach or security failure.
- Cyber crime: This is insurance for the loss of money from your financial account due to fraudulent instruction by a third party.
- Cyber deception: This is insurance for the loss of money as a result of the a social engineering or phishing attack against you which results in your voluntary transfer of money to an unintended third party.
- Privacy and security liability: This is insurance for claims made against you that typically arise from your failure to protect sensitive information, including subsequent actions by a regulator.
- Media liability: This is insurance for claims made against you that arise from the content of your website, social media and other promotional material.
Sample claims scenarios:
Cyber security insurance offers broad coverage designed to protect businesses like yours. Here are some examples of what could go wrong and how it could be covered:
- Stolen laptop: A thief steals your laptop, containing sensitive client information from your vehicle. A cyber policy could cover the costs you incur to notify your clients of the data breach, including identity protection and credit monitoring services and legal costs.
- Phishing expedition: You or one of your employees clicks on a link from an email that came from what appeared to be a trusted source. The message was from an experienced hacker and contains malware. Your company’s data is locked and held for ransom. A cyber policy could cover the cost of expert assistance and payment of a ransom.
- Data recovery: Your company’s server was compromised by a former employee. You have lost all access to your company’s data and the data could potentially be destroyed. A cyber insurance policy could protect your business and provide coverage for the costs to replace, restore, repair, or regain access to your data following a breach.