Why do you need a cyber security insurance policy?
Key takeaways
- Cyber incidents are a routine business risk now, not an edge case reserved for large enterprises.
- Common exposures include phishing, ransomware, business email compromise, and stolen credentials.
- A cyber policy can respond to breach response costs, notification, restoration, business interruption, and liability.
- General liability and property policies generally do not cover a cyber event, so the coverage has to be added deliberately.
- Coverage should match how your business actually stores and handles data. Capitol Benefits places cyber coverage for DMV businesses.
Is your business missing a key security component? If you don’t have a quality cyber security insurance policy, the answer is yes. The odds of a cyber event occurring at a business is 7.5 out of 10, and hackers will stop at nothing to gain access. In fact, every 39 seconds, there is a cyber event somewhere on the web. Don’t let that somewhere be your business.
The most common type of common cyberattack is called ransomware, and it could cost your business up to $800,000 without a cyber insurance policy. On top of monetary loss, there’s time lost and the harm these attacks could do to your clients’ opinions of your business.Yes, a data breach that compromises your customers’ data could cause you to lose their trust and business. Even large corporations like Uber are at risk, they reportedly lost the information of over 57 million riders and drivers after a data breach in 2016 and had to pay $148 million to settle a nationwide investigation.
With a cyber insurance policy, you’re protecting yourself and your clients. Think of it as a supplement to, General Liability Insurance, which does not cover cyber events. Besides legal fees and expenses, cyber insurance typically helps with:-
Notifying customers about a data breach
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Restoring personal identities of affected customers
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Recovering compromised data
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Repairing damaged computer systems
Frequently Asked Questions
What does cyber insurance cover?
Depending on the policy, it can cover breach response and forensics, customer notification, credit monitoring, data restoration, business interruption from an outage, extortion or ransomware payments, and liability claims from affected parties.
Does my general liability policy cover a cyber incident?
Generally no. Standard general liability and property policies were not designed for data and network exposures, which is why cyber is written separately or added by endorsement.
Do small businesses actually need cyber coverage?
Smaller businesses are frequently targeted precisely because their defenses tend to be lighter, and they often lack the reserves to absorb a breach response out of pocket.
What reduces both cyber risk and premium?
Multi-factor authentication, offline or immutable backups, employee phishing training, prompt patching, and a written incident response plan. Many carriers now ask about these during underwriting.
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