The Case for Cyber Insurance
Think about all the various digital devices that now connect to business networks. These devices, in addition to the internet, amplify opportunities for people to access your company’s assets. The worst year ever for cyber attacks was 2017. Although many people think cyberattacks happen mainly in large enterprises, the fact is small businesses are increasingly becoming targets for cyberattacks. Whether your business is small or large, if it stores and maintains customer information. collects online payments, or uses the cloud, you should consider adding cyber insurance to your budget.
What is Cyber Insurance?
Sometimes referred to as cyber risk insurance or cyber liability insurance coverage (CLIC), a cyber insurance policy helps mitigate risk by lessening costs involved with recovery after a security breach. About one-third of U.S. companies currently purchase some type of cyber insurance.
Digital devices and the internet are gateways to cyberattacks, which can cause moderate to extreme losses for companies, large, medium, or small. Your business hopefully has a risk management plan, in which decisions are made to decide which risks to avoid, accept, control or transfer. When you transfer risk, that is where cyber insurance steps in.
Cyber insurance is still evolving and cyber risks change often. Sometimes an organization does not report the full impact of a breach to avoid negative publicity and damage its reputation. That can mean underwriters have less data on which to determine the financial impact of cyberattacks.
The cost of cyber insurance coverage is usually based on a company’s industry, the type of services provided, data risks and exposures, security posture, policies and annual gross revenue.
A good first step is to create a cyber risk profile for your company, then create a list of expenses you want to have covered in the event of an incident. Then, you can speak with your independent insurance agent to get answers about cyber insurance and feel confident you will be given solid advice to make the smartest decision.
