Cybersecurity insurance helps businesses mitigate their financial risk exposure by offsetting costs related to damages and recovery. It covers risks like:
- Network security
- Privacy liability
- Network business interruption
- Media liability
- Errors and omissions
Yet, while cyber insurance offers organizations a safety net against tech-related risks like data breaches and ransomware attacks, most companies fail to ask for or prioritize their IT team when choosing a policy. And that’s a choice that can come back and harm them in a big way if the coverage their finance and operations teams have recommended isn’t adequate to cover actual losses.
Pay Now or Pay Later
For most businesses, it’s typically the finance team that deals with insurance matters. But cyber security is more an IT issue than it is an operational or finance one. How so? It’s your IT team that understands the latest trends in cyberattacks. And they know more than anyone else what coverage a cyber insurance policy should contain.
Think of it like buying home insurance, and, to keep premiums low, you choose a policy that doesn’t include liability insurance. Then someone gets seriously hurt on your property, and you’re left paying for their medical expenses and other damages out-of-pocket.
As with most insurance, not having sufficient coverage often ends up costing more than the cost of the insurance premiums.
Talk to Your IT Professionals
Even minor cyber incidents can disrupt a business in significant ways. Cybersecurity insurance can help you recover, but only if you’re covered for the right risks.
If your business is like most these days, it digitally stores important data like customer and employee names, credit card numbers, Social Security numbers, and more. Many organizations, particularly SMEs, also store company financial data on their servers.
So, how much cybersecurity coverage does your business need? Every company has different risks and needs, but your IT team can help you determine what level of coverage is right for you. They can advise you on which items covered by cyber policies are necessary to keep your business safe and educate you on the areas where your IT infrastructure is most at risk.
What Does Cybersecurity Insurance Cover?
Most cybersecurity insurance policies offer:
- Liability coverage
- Loss or damage to electronic data
- Legal and investigation fees
- Loss of income
- Cyber extortion losses
- Notification costs
- Damage to reputation
Most policies offer general cyber liability coverage, while other offerings are optional depending on your business’s particular risks and needs. The majority of policies limit coverage to between $1 million and $5 million, though some offer $20 million or more.
Areas to discuss with your IT team to determine if you need specific coverage include:
- Network security coverage for failures like data breaches, ransomware, and business email compromises.
- Privacy liability, which covers the costs related to regulatory investigation and remediation following leaks of sensitive personal information.
- Technology errors and omissions (E&Os) for cyber risks caused by your business to another business.
- Business interruption, or the costs associated with interruption to standard operations. This can include everything from lost productivity due to limited access to the time investment for remediation and data recovery.
Discussions should also include so-called “digital doomsday” scenarios that might play out in the coming months and years. A changing work environment has made communications networks less secure, and there’s recently been a sharp upswing in insider threats and malware attacks. Sadly, cybercriminals have also seized on the pandemic-related global upheaval, posing as healthcare providers or regulatory bodies.
As some employees return to the workplace and begin operating within firewalls, they could face hacking attempts by bad actors looking for short-term gains by stealing personal and financial data. Some hackers have also tried stealing corporate data and disrupting business operations by infiltrating Zoom and other remote meetings.
A significant, long-term challenge companies will face is that employees returning to the physical office could import malware with their personal devices. If they do, cyberattackers might be able to embed themselves in networks and lay dormant, stealing valuable strategic data at the time and place of their choosing.
Ultimately, cyber insurance policy providers will increase their requirements for security controls from their clients. And when they do, your business needs to be ready to meet those demands. Contact 360 Visibility today for an IT security audit to assess your company’s cyber risk.