Cybersecurity Insurance 101: What You Need to Know
When you purchase a home or buy a new car, you’ll immediately want to protect your investment. Insurance can help secure your purchases from many unforeseeable instances. In the event of an intruder or an unexpected accident, you’ll want the peace of mind of knowing that your valuable belongings are covered.
Your data is no different. The details about you, or your business, that circulate the internet need just as much security as any of your tangible possessions. For this reason, it’s important to explore your cybersecurity options, so you can find the right level of protection for your sensitive information.
What is Cybersecurity Insurance?
If you own a business that operates online in any capacity, then you possess some data on all of your customers and employees. In the event of a cyber-attack or other data leak, cybersecurity insurance will cover your business’ liability, including in situations where customer Social Security numbers, health records, and similar information are involved.
Benefits of Cybersecurity Insurance
Cybersecurity insurance extends far beyond the simple act of helping pay back customers when hackers attack. There are many reasons to invest in this critical piece of protection.
Cyber attacks have the capacity to funnel millions of dollars out of your bank account and into a hacker’s pocket. While the money is removed through no fault of your own, you are still responsible for getting your customers their money.
With cybersecurity insurance, you are provided significant financial support to help get back on your feet. What’s more, insurance providers can help minimize the damage from an attack and build you back up stronger than before.
Access to Resources
The strongest cybersecurity insurance providers will give you more than a piece of paper that claims your data is covered. Many will take it one step further. A wide range of providers also has a veritable arsenal of security tools at their users’ disposal.
For instance, you might be able to connect with IT support or financial experts via a helpline, so you can tackle any problem that comes your way, day or night. Or, you might be granted access to online programs that let you monitor your accounts in real-time. This way, you can see for yourself that your business is running smoothly.
Peace of Mind
Perhaps most importantly, cybersecurity gives its owners peace of mind in knowing that all their data is safe. While it may not altogether halt attempts at hacks or data breaches, business owners can rest easy knowing that all their information is backed up and protected behind high levels of security.
Even if the worst were to pass, they have the benefit of knowing that a team of professionals is on their side, who will help them resolve any issues that might occur.
Types of Cybersecurity Insurance
Acknowledging that cybersecurity insurance exists is great, but a smart business owner will spend just as much critical thought on selecting the right type of insurance for their enterprise.
Each type of insurance meets a different need, stores data differently, and comes with its own set of risks and rewards. We break down some of the most common types of cybersecurity insurance for businesses, so you can compare and contrast the options for yourself.
When you begin the search for cybersecurity insurance, you’ll most likely come across first-party coverage early on. This type of liability insurance takes care of expenses your business may be charged when a data breach occurs.
This type of coverage is not choosy about what exactly qualifies as an incurred expense in these circumstances. Your insurance can help take care of the cost of customer notification, credit monitoring, and more. It can even help with an investigation into the cause of the cyber attack, as well as the public relations work it will take to get your brand’s reputation back to its regular standing.
If your business carries and stores data in any capacity, it’s wise to start with first-party coverage. With its broad coverage and wide-reaching services, virtually any business can benefit from this level of insurance.
Third-party coverage is especially geared toward businesses that handle high volumes of sensitive customer information. Hospitals, online retailers, and the like regularly take in, sort, and file information that customers would rather not have exposed to the public.
Third-party coverage is designed to help out with lawsuits that arise when customers feel betrayed by a trusted brand that let their data leak. This kind of coverage assists in handling the cost of an attorney, court-ordered damages, and other legal expenses.
The main difference between first-party coverage and third-party coverage is the direct benefactor of an insurance claim. In first-party coverage, the business itself benefits from a claim, as the insurance provider helps build the business itself back up. On the other hand, third-party coverage mainly concerns lawsuits and other external affairs that result from the data breach.
Data Breach Response Coverage
As you are likely well aware, data breaches are expensive. A business can lose much more than data points; it can lose the faith of its entire customer base. Data breach response coverage helps a business repair its name and make things right with its customers.
This type helps take care of notification and credit monitoring of affected customers, as well as the labor costs that are required to restore or re-copy the lost data. Data breach response coverage can also help handle some expenses incurred from the interruption of the business. This insurance does not, however, assist in legal expenses or other related costs.
Cyber Extortion Coverage
Some hackers are more up-front about their demands than others. If you receive a threat of breach from a criminal, cyber extortion coverage is there to help sort things out.
This coverage can pay the ransom for the data, while also supporting the payment of security experts who can track down and catch the hacker. In a similar manner to other forms of kidnap and ransom insurance, cyber extortion coverage is there to let businesses leave the criminal chasing to the professionals.
Network Security Liability Coverage
Generally speaking, network security liability coverage is a broad-band coverage plan. It involves many aspects of third-party coverage, such as settling legal expenses and paying fines, while also incorporating first-party coverage, including public relations support and data restoration. Businesses that operate at a high risk of breach, due to a high volume of sensitive information, or any other reason, should consider this coverage.
Secure Your Information and Your Composure
Customers put a lot of faith in a business when they hand over sensitive data. If you deal store this information anywhere, you’ll want to make sure it’s protected. You can’t predict when the next cyber attack will hit. But, you can feel safe knowing that you have a plan in place that will restore and secure your business, as well as the customers you serve.
Need help addressing cybersecurity? Consult with our knowledgeable team of experts at Teksetra! We offer business support to help you create a cyber-secure environment for your entire organization.
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