It’s no secret that cyber-attacks against businesses are on the rise, and consumers are on edge about the risk of companies compromising their sensitive information. Yet, only 39% of owners admit to purchasing cyber insurance policies for their businesses. With the average cost of data breaches reaching as high as $4.45 million, companies would benefit from considering an investment in a cyber insurance plan.
Cyber Showdown: Cyber Insurance vs. Traditional Coverage
Ensuring coverage at your company goes beyond the typical insurance plans. Where traditional insurance covers instances of physical liability or property assets, these might not extend to digital risks.
With cyber insurance, companies can find a policy that is tailored to their needs for digital protection. These policies are designed to cover the unique and ever-growing attacks that come with working in the digital space.
Coverage That Clicks: Types of Cyber Insurance Protection
Not every cyber-attack is the same, so not every cyber insurance plan is the same. Depending on your provider, policies can include coverage for any of these three situations:
- Data Breach Liability: These breaches are likely to result in lawsuits against the company, especially when sensitive customer information is stolen. With a liability plan, the policy will protect the businesses and cover legal costs.
- Ransomware Response: Remediating systems after a ransomware attack can be costly, even more so when hackers demand a ransom. With ransomware protection, companies can work with their policyholders to recoup the funds lost from the attack.
- Business Interruption: Businesses that temporarily shut down due to a cyber-attack risk losing income. When Business Interruption is covered by cyber insurance, the policyholder will cover the income lost during this unprecedented downtime.
Risky Business: Assessing Your Cyber Threats
Before deciding which cyber insurance plan is right for the company, there must be an assessment of the company’s cyber risks.
- Identify Your Most Valuable Data: Understand what sensitive data the company has stored and how important it is to protect it.
- Evaluate Your Security: Analyze the company’s current cybersecurity protocols and what measures are in place to ensure protection.
- Weigh the Fallout of a Cyberattack: Contemplate the likely fallout if a cyberattack occurs. Would the company be sued or lose income due to downtime? Would there be significant damage to the company’s reputation?
- Learn from Past Cyber Incident: Refer to the results of any past cyber incidents to determine how likely a future attack is and what the results may be without cyber protection.
Final Firewall: Wrapping Up Your Cyber Defense
Protecting a business from cyber threats is just as crucial as securing physical assets. While traditional insurance covers physical risks, cyber insurance provides vital protection against data breaches, ransomware, and business interruptions caused by cyberattacks. By assessing their unique risks and investing in the right cyber insurance plan, companies can better secure their future and minimize the financial impact of potential cyber incidents.
