Cyber liability insurance brokers will be the first to tell you that in this age of the Internet of Things, many businesses are feeling the pressure related to protecting sensitive business data and customer information. Businesses small and large are frequent targets of cybercriminals looking to profit from their activities. No business is safe from cyber threats, including extortion plots via ransomware.
Because of the inevitable damage and business loss due to such attacks, cyber liability insurance should be part of the plan to combat this problem. But what is cyber liability insurance and how does it help? Consider the following details, including how to find the best policy and what you can do now to protect your business.
Cyber Liability Insurance
The costs associated with recovery after a data breach can be costly and detrimental to your business. According to the Insurance Information Institute, some of these costs include:
- The cost to recover business computer systems and restore lost data.
- Operational losses due to downtime to recover lost business systems.
- Fines incurred by the business levied by government agencies because of failure to comply with regulations requiring protection of customer data.
- The cost to settle lawsuits launched by customers suffering losses due to data breached.
Cyber liability insurance can help save your business should you incur these costs.
What It Covers
This type of insurance is designed to help by paying for costs incurred due to a cyber breach. Because policies vary according to business needs, the extent of coverage varies. However, typical coverage might include:
- Legal liability fees and expenses for response to a data breach, including customer notifications and costs for customer support such as credit monitoring.
- Business interruption expenses and costs related to restoring and replacing affected business systems and information.
- Expenses related to the recovery of information held hostage by cyber extortion attempts.
To pinpoint coverage options for your business, experienced cyber liability insurance brokers can be instrumental in deciphering coverage needs and options.
Is Cyber Liability Insurance Right for Your Business?
If you have any part of your business online or collect customer data, then you are a candidate for some sort of cyber insurance, reports the QuickBooks Resource Center. While you may already have general business liability insurance, it is not enough, since cyber liability is not part of the coverage.
The bottom line is that if you do not have this insurance and your business is hacked, you are totally responsible for the costs to recover and mitigate the effects of the breach. Cyber liability insurance can soften the blow.
Before going on an insurance quest, assess your risks and vulnerabilities to facilitate an informed discussion with knowledgeable cyber liability insurance brokers. The end result will be a policy that matches your needs.
Pinpoint and Fix Vulnerabilities
Often, businesses can do a lot internally to reduce the risk of cyber threats. The National Institute of Standards and Technology recommends different strategies to shore up vulnerabilities that can lead to cyber hacks. Some of these strategies include:
- Installing antivirus and antispyware software on every business computer and update the software regularly.
- Providing secure Internet connections that involves installation of a firewall between company networks and the Internet.
- Securing wireless access points by using encryption mechanisms for transmitted data.
- Keeping all operating systems and applications updated. Software vendors generally provide update notices or automatic updates. Don’t ignore these updates.
- Backing up data used or generated by the business regularly to prevent loss when breaches occur. Store backups separately, such as in a cloud-based storage system.
- Controlling access to business computers and networks, including preventing unauthorized access.
- Limiting data and information access, allowing workers access to only the specific systems they need to get work done.
- Training personnel on security protocols used by your company. This includes training them on how to handle sensitive information and how to protect customer data. This also includes training personnel on company security policies that address the use of company computer, networks and Internet connectivity, whether at work or at home.
Putting these recommendations in place can reduce risks. As reputable cyber liability insurance brokers will tell you, risk control is all part of the plan when getting the right cyber liability insurance.
Implementing and using preventative measures is an import part of combating cyber threats, however, it is also important to have a post-attack recovery plan. That’s the point of having the cyber liability coverage. The right policy can help you launch a timely recovery in the event of a breach.
After assessing vulnerabilities and implementing risk control measures, it’s time to work with a professional to find the coverage right for you. Cyber liability insurance brokers can guide you to the right coverage based on your business needs. It is important to understand coverage and limitations of the policy you ultimately choose.
Complex insurance decisions require expertise and know-how. To make it through the maze of choosing cyber liability insurance options, the smart choice is to work with qualified cyber liability insurance brokers. Working with these professionals, assess and fix any vulnerabilities to minimize cyber threats. Then, choose a policy that makes sense for your business.