Cyber Insurance: Are you covered?
Did you know that the majority of cyberattacks happen to small and medium-sized businesses? The main reason is that small and medium-sized business owners are less likely to have active cybersecurity plans in place. Plus, organizations of this size tend to conduct a lot of their business online, thereby accepting credit cards and storing customer information, which is exactly what are looking for.
Surprisingly, many businesses also do not have a thorough understanding of where all the private and confidential information they collect is stored. Even if they have policies and procedures concerning the collection and storage of data are in place, they are not always enforced. Plus, companies could be collecting data that they do not even need.
The average cost of a data breach for a small business is approximately $86,500, according to a 2016 study by Kaspersky Labs, an Internet security firm. This does not include reputational damage. Unfortunately, depending on the financial state of the business and other factors, overcoming a cyberattack may not be possible.
Regardless of if your business has a cybersecurity plan in place, having a cyber insurance plan can be very effective in helping your business recover from a data breach. Many cyber insurance plans include services that help cover costs for business disruption, revenue loss, equipment damage, legal fees, public relations expenses, legally mandated notifications, credit monitoring, and legal fees.
Cyber insurance providers typically offer two types of plans depending on industry, products, and services with which a business is associated. You can choose to have one or both types of coverage.
- First-party coverage helps cover costs if your network is hacked or your data is stolen.
- Third-party coverage offers protection if a customer or business partner sues you for allowing a data breach to happen due to negligence.
Cyber insurance can also play a role in helping to prevent cyberattacks. Many companies that offer cyber insurance encourage their customers to create, implement, and test a business continuity plan and an incident response plan. When deciding how much coverage you should purchase, underwriters will utilize real data and analytics to provide you with detailed risk scoring to help you better understand and address your cyber risk.
Technical Framework can assist you by facilitating the review of your cyber insurance policy annually. We can also work with your insurance agent to review your cyber liability, crime, and other relevant policies to help ensure your business is covered.