Not all cyber insurance coverage is created equal.
Today’s businesses are more reliant on technology than ever before. They use mobile devices to keep employees connected, complex digital supply chains, and cloud-based services to store important information. And while technology no doubt enhances efficiency, it also leaves businesses vulnerable to online threats and data breaches.
That’s where cyber insurance comes in. Read on to learn what to look for in cyber insurance coverage for your business so you can find the most comprehensive place for your needs.
Before exploring the nuances of cyber insurance coverage comparisons, it’s important to have a solid understanding of what this type of coverage entails.
At World Insurance, our cyber insurance coverage definition is as follows: “Cyber insurance is a specialized form of insurance that is designed for today’s digital age. It’s uniquely underwritten to help protect businesses from online threats and the risks that potential data breaches pose.”
In other words, cyber liability insurance can help businesses bounce back by covering expenses associated with a cyber threat or data breach. Considering the average cost of a data breach could reach $5 million this year, this type of coverage is crucial for protecting a business’s finances.
There are many different types of cyber insurance to choose from. Today, we’re going to cover what to look for in cyber insurance coverage for your business. This includes everything from the types of coverage most businesses need to the qualities to look for in your insurance provider.
Consider this your ultimate cyber insurance coverage checklist.
First and foremost, you want to ensure your cyber insurance policy covers the direct damage and financial losses to your organization. First-party coverage is essential for helping protect your business. It can include specific coverage for:
Cyber risks can cost a business an incredible amount of time and money. First-party insurance covers expenses for recovering compromised data, attorney fees, forensics costs, regulatory compliance, media communications to manage the breach, and more.
You should also ensure your cyber liability coverage can help protect your business from third-party claims. This includes:
Coverage for third-party losses ensures businesses can financially recover from lawsuits as a result of a data breach. The ability to swiftly and fairly make payments to affected consumers can also help protect a brand’s reputation during these stressful times.
Cyber extortion and ransomware are sometimes included in first-party coverage, but not always. They are also some of the most costly and destructive cyber risks, so it’s important to ensure your insurance covers these events.
You also want to consider the coverage for physical damage resulting from cyber events. Hardware damage caused by a cyber incident is also known as bricking coverage cyber insurance. Some malware can render a business’s computer systems and other hardware useless. This coverage can help you get back up and running quickly without a major financial strain.
Along with these specific coverages, the Federal Trade Commission recommends that businesses choose a cyber insurance policy that also includes coverage for:
In this day and age, cyber attacks can happen anywhere at any time. Businesses must look outward to consider external threats in addition to internal risks such as bad actors, system weaknesses, and human vulnerabilities. The best cyber coverage helps address all of these threats.
What to look for in cyber insurance coverage for your business also extends to your insurance provider. Your insurance provider ensures your business receives the attention it deserves and you’re supported in the event of a cyber attack.
Some qualities to look for in a cyber insurance provider include:
Without a trustworthy insurance provider, your policy isn’t as strong.
Cyber coverage is quickly becoming a form of insurance that most businesses should have. No matter if you operate a restaurant, a small business, a large financial institution, or a manufacturing plant, this type of coverage should be a part of your overall business insurance.
A comprehensive cyber insurance policy is a paramount part of any business’s risk management plan. The experts at World Insurance can explain the nuances in more detail and provide a quote. Cyber insurance is relatively inexpensive compared to the cost involved with fixing a breach.
Learn more about your options for business cyber insurance today.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.