As a business owner, you have access to many types of specialty insurance products. In addition to insuring yourself against the usual risks–liability, malpractice, theft, natural disasters–you can purchase insurance that protects you from events such as:
- Errors and omissions (commonly used by engineers, software developers, and consultants)
- Force majeure, or inability of one or both parties in a contract to fulfill their obligations
- Real estate title issues
Did you know that you can also insure yourself against losses related to your data security and compliance? It’s called cyber insurance, and it’s one of the fastest-growing specialty business insurance products in the market.
This article describes what cyber insurance is, the specific losses it covers, and why it’s so important for small- and medium-sized businesses to obtain it.
Cyber Insurance Explained
Modern businesses in all industries live or die by the quality of their data and how they use it. So it’s no surprise that protecting your data should be a top priority for your business. This is true in particular for data related to the personal privacy of your customers.
With the growing dangers of cyberattacks and the increased need for cloud security, Cyber insurance protects you from direct losses and legal actions related to your business data. In particular, cyber insurance covers:
- Cyberattacks: It takes time and expertise (read: money) to recover data that has been compromised or damaged. In the case of ransomware attacks, your data may be lost permanently, even if you choose to pay the ransom.
- Data compromise response: If sensitive customer data in your possession is stolen in a cyberattack, you are responsible for covering their expenses for credit monitoring and identity theft recovery in most jurisdictions.
- Regulatory actions: A growing number of states and countries have laws and regulations that impose stiff fines on businesses who fail to protect their customers’ data.
- Privacy lawsuits: You don’t have to be hacked to suffer a data-related loss. Posting customer information on your website or on social media can expose you to privacy lawsuits, including class-action suits.
Specific cyber insurance policies will cover some or all of these risks, among others.
Why You Need Cyber Insurance
No business is too small to be of interest to hackers. In fact, hackers know that smaller businesses tend to have less robust cybersecurity measures in place, making them easier targets than larger businesses with dedicated IT security teams.
Similarly, no business is immune from lawsuits or regulatory fines. Unfortunately, few small firms have the resources to defend themselves against or settle multiple lawsuits or pay hefty fines in regulatory action.
In fact, many smaller businesses in these situations can’t recover and end up closing their doors for good. Cyber insurance can prevent this outcome for your business.
Compliance Is the Key to Insurability
Just as automobile insurers offer favorable rates to customers with clean driving records, cyber insurance companies want to know if you comply with cybersecurity and data privacy standards. This is where 360 Visibility can help.
At 360 Visibility, we are experts at meeting compliance requirements for cloud-hosted databases and applications. So whether you have healthcare data and are subject to HIPAA requirements in the U.S. or need to observe the European General Data Protection Regulation (GDPR) to do business in Europe, we can set you up with a compliant cloud solution that can earn you the best cybersecurity insurance premiums.
Don’t wait for a breach or lawsuit to find out you need cyber insurance. Contact 360 Visibility today for the best in compliant cloud security.