What is cyber insurance? Do you really need it? What does it cover? How do you get it? I’m going to answer these questions and more, coming right up.
Okay, so what is cyber insurance?
The answer, broadly speaking is a policy form designed to protect a company from the costs and financial implications of cyber attacks, data privacy breaches, hacker threats, ransomware attacks, and more.
Why is Cyber Insurance an important policy form of insurance to consider?
First are the high costs associated with a cyber event and here are just three examples
Ransomware – this is an event where attackers seize control of your network and hold it hostage until you pay a ransom – which can be in the tens to hundreds of thousands of dollars. Until it’s paid, you’re unable to get to your data or operate your business
Data Breach – here an attacker steals private information of your customers and employees from your network and publishes it on the dark web for sale.
These events usually trigger lawsuits alleging your failure to keep private information safe and can result in expensive defense and settlements. At the very least you’ve got a mandatory notification procedure to execute which in itself can be difficult and expensive.
Last but not least is wire transfer frauds – and I know a lot of people will say – this will never happen to me, but let me tell you that we’ve had very smart clients tricked into wiring money to fake accounts and lose a lot of money, so it does happen and these situations are growing very sophisticated.
Second, your general business policies such as a BOP, business owners policy, or umbrella, don’t cover events that occur from cyber risks.
While you can endorse some cyber protection to a BOP policy it’s usually very limited and I don’t recommend it.
Third, should your company face a cyber event or attack a cyber policy often provides assistance in the form of a breach response coach – an expert to help guide you through the legal, digital, and regulatory challenges you’ll face to respond and recover.
Lastly, the threat level only continues to rise.
No company is immune from attacks, threats, events, and shutdowns. Firms small on one person companies to large multi-nationals all face these risks.
Without cyber insurance, you face these risks on your own and pay for remediating the costs out of pocket which can threaten profitability and sustainability.
How do you get cyber insurance?
You should speak to an expert insurance broker that specializes in cyber insurance and can go out to the cyber marketplace to obtain the right proposal for you.
My advice is to ask for options – most small companies purchase $1 million limits of protection, but I recommend looking at options for $2 million and higher limits.
Need help finding the right cyber insurance for your company?
Give me a call, drop me an email, or schedule a call on my calendar. I’m happy to give you my opinion on what you need and get you some ideas of costs.
Thanks.
