The increased frequency of cyberattacks has made small enterprises even more vulnerable. The reason for this heightened danger is that they may have less reliable security measures than larger businesses, in addition to storing sensitive data like customer and intellectual property. A holistic approach is advised, even though conventional protections like firewalls, data backups, and frequent cybersecurity training are essential. Cyber insurance is a crucial component of this strategy since it offers an extra financial safeguard for your company in the event of a cyber attack.
Cyber insurance: what is it?
Cyber insurance, sometimes referred to as cyber liability insurance, is a type of coverage that focuses on losses that a company may suffer as a result of data breaches or cyberattacks. It can pay for expenses related to the recovery procedure as well as losses resulting from the incident. Businesses can drastically lower their total cyber risk profile by incorporating cyber insurance into their cybersecurity strategy.
The advantages of cyber insurance for your company
The following are just a few benefits of using cyber insurance:
Protection against financial losses
Cyber insurance offers important financial protection against a range of financial losses, including legal costs from employee and customer lawsuits after a data breach, regulatory fines, and lost revenue from downtime. But, you should constantly confirm the types and amounts of losses that your cyber insurance provider actually covers.
Assistance in paying for ransomware
Imagine the frightening situation where a cybercriminal uses ransomware to get sensitive information like the credit card numbers of your clients or the Social Security numbers of your staff. You’re willing to invest whatever is required to prevent this from happening since you understand the potentially disastrous effects it could have on your company. Nevertheless, the ransom demand can be high, and paying it could have unintended implications later on, including making it impossible to acquire assets required for expansion. Fortunately, cyber insurance can help defray these kinds of expenditures.
Support for notification costs
Your company is required by law to notify customers in the event that their personal information is stolen. It can also be necessary for you to notify your stakeholders, business partners, and suppliers. This can be very expensive, depending on how many notifications you receive and where in the world your firm operates (local, regional, national, or worldwide). Thankfully, cyber insurance might be able to assist with paying for your notifications.
Services for data recovery
In the event that a data breach occurs at your company and your data is corrupted or deleted, you must restore the lost data. Your cyber insurance provider may pay for data recovery services, depending on your coverage package. It may take years to recover your data if you don’t have access to the specialized tools and knowledge that these businesses offer.
How to obtain insurance for cyberspace
Purchasing cyber insurance involves more than just logging onto a plan. You must, in particular, fulfill the requirements set forth by an insurance company. When evaluating a customer, providers often take into account two factors: the client’s cybersecurity posture and compliance with legislation.
A cyber insurance provider is more likely to take you as a client if your company’s IT is safe and compliant (particularly for highly regulated industries like finance or healthcare). The provider may reject your application if it seems that your business ignores cybersecurity or doesn’t follow the law.
How to lower the cost of cyber insurance
There are techniques to increase your eligibility for a discounted rate if you are concerned about the cost of cyber insurance.
— Implement preventive security measures including planned data backups with recovery plans, frequent reviews of your security posture, and personnel training for the entire organization.
— Create and submit incident response reports to demonstrate how effectively your cybersecurity handles crises.
— Examine the cybersecurity readiness of any outside parties that your company frequently works with (vendors, business partners, etc.). Demonstrating the robustness of their cybersecurity also speaks highly of you.
Insurance companies perceive your business as less risky when you take these and other actions.
Speak with one of our experts to learn more about cyber insurance and other ways to protect your systems and data. Reach out to us right now.