Do I Need Cyber Insurance for My Business?
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Believe it or not, many organizations still believe that a cyber breach won’t happen to them. Regardless of all the media coverage and statistics, they believe they’re not at risk. But the majority of cyber experts believe that no matter the size or type of business you have, you’ll ultimately suffer a data security breach – and chances are, you already have but just don’t know it yet.
As the world becomes more connected, the need for organizations to manage their data security increases. And even though this may seem like a never-ending battle, there’s an easy step you can take to improve your network security: purchasing cyber insurance.
So, what does cyber insurance cover? In general terms, it can provide both first and third-party liability coverage.
For first-party coverage, the policy would cover things like notification cost, credit monitoring, identity theft, crisis management, call center setup, data restoration, cyber extortion, and business interruption.
Third-party coverage responds to suits brought by third parties, regulatory investigations and media liability. Without this coverage, your organization is solely responsible for the cost associated with a data security breach as well as the potential reputational impact it might have on your business. For most small and mid-size businesses, the cost could be substantial enough to close your doors.
Cloud Service Providers
Many organizations utilize third-party services such as cloud service providers to handle their data, often believing their data and risk is protected. Unfortunately, it isn’t. If you request information and store it with a third party or on the cloud, you’re still legally responsible for keeping it safe. And while it’s in the third party’s best interest to keep the information secure, no data management system has proven impenetrable to security breaches. Having cyber insurance will provide protection if your third-party host suffers a loss.
Finally, if you decide to purchase cyber insurance, there are a couple of things to take into consideration. First, make sure you seek a broker with experience and expertise in cyber insurance. Second, remember that not all carriers are the same. Since cyber insurance is non-standard form, there is a wide range of coverage and forms. Third, ensure you purchase appropriate limits to cover the potential loss exposure facing your company.
If you’re considering cyber coverage or have additional questions, reach out to the ‘A’ Team for help.
- 10 Tips for Buying Cyber Insurance
- Private Companies Must Wake Up On Cyber Insurance
- Cyber Liability E-Book
- Cyber Security Threats: Assurance University Webinar Replay
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