Cyber liability insurance is a type of insurance policy that protects businesses from the expenses incurred after the result of a data breach, including stolen or damaged intellectual property. Organizations of every size face cyber risk as the threat landscape continuously evolves. As your organization’s network expands, cybercriminals seek to exploit vulnerabilities in your security layers. Planning for cyberattacks with cyber liability insurance combined with a proactive cybersecurity strategy, will accelerate your business’ protection against costly cyber incidents.
Cyber insurance protects your company from privacy, security, operational, and service risks due to cyber exposure and malicious third parties. Cyber liability insurance protects small businesses and mid to large size companies in the event of a network cybersecurity failure which causes your business to succumb to malware, ransomware, business email compromise (BEC), distributed denial of service (DDoS) attacks or data breaches.
Cyber liability insurance providers breakdown policies into four categories based on the type of cyber exposure risk:
Cyber insurance coverage can include the costs associated with recovering data, sensitive information, and stolen property. Cyber insurance companies work with businesses to help cover losses and financial hardships against unforeseen incidents in a company’s security network.
Privacy liability cyber insurance covers customer and employee information, especially for organizations with extensive sensitive information risk exposure. Privacy liability coverage protects the insured from losses due to a failure to safeguard customer sensitive information in the event of a privacy breach, including leaked credit card information, credentials, Social Security Numbers (SSN), and other personally identifiable information.
Cyber insurance with network security coverage can alleviate the expenses incurred from a cyberattack. In the aftermath of a cyber incident, a cyber insurance policy can handle the threat forensics, data restoration, consumer notification of the breach, identity restoration, legal, and public relations costs.
Threat forensic teams need to determine the extent and scope of a breach to identify compromised customer data and targeted assets impacted by an incident. Threat forensics investigation is costly but necessary in preventing future cyberattacks. Cyber insurance can help reimburse your organization’s expenses associated with attracting the high-skilled security forensic experts who conduct threat analysis.
Companies that rely heavily on technology and their internal network to drive mission critical objectives for their organization face greater operational risk in the event of a security breach. Business networks affected by cyber incidents experience interruptions to operations such as profit loss, cost to remediate, and wasted organizational time. Business interruption insurance policies involve covering expenses due to lost time and assets. Implementing this type of insurance can help mitigate disruption resulting from a data breach, cyber extortion, and third-party damage through reimbursement.
Technology error and omission (E&O) coverage is a kind of professional liability insurance that works in conjunction with a standard liability policy to protect businesses when a client experiences damages and losses. When a business undergoes a technology failure and a client attempts to sue the organization, technology E&O insurance helps defend your business caused by mistakes in your goods and services. These errors are often unintentional. Examples of claims covered by E&O include premature release of a product, product misrepresentation, poor advice, or negligence due to the product.
Cyber insurance coverage supports businesses of all sizes in the event of a cyberattack. Depending on the risks they face, companies can choose a policy tailored to the data, personal information, and assets they need to protect. Cyber risk insurance helps offset the cost of a breach and augment recovery efforts after the damage has been done.
Threat actors target small businesses because they are restricted to concise budgets. Compared to their large enterprise counterparts, small businesses are typically focused on company growth and don’t always have the robust resources to add network security layers. Small businesses using their devices to store sensitive data are especially soft targets for cybercriminals who seek out intellectual property. These vulnerabilities are susceptible attack points to data thieves. Implementing cyberattack insurance for your small business helps protect you from incurring expensive damages following an incident.
Cyber liability insurance companies do not provide policies that cover cybersecurity oversight, avoidable mistakes, and negligence responsible for data loss or data theft.
Want to learn more about Managed Service Providers (MSPs) and today's threat lanscape? Listen to Lock and Code Podcast: The MSP playbook on deciphering tech promises and shaping security culture
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