Any modern organization that conducts processes or stores information online should prioritize cybersecurity. According to research, a hacking attack happens every 39 seconds, which means your business could be taken over by cybercriminals at any time.
Protecting your data from getting hacked requires the implementation of strict security measures and solutions. To safeguard your business from financial ruin because of a data breach, consider getting a cybersecurity insurance policy.
What is cybersecurity insurance, and does your business need it?
In 2020, data breaches cost $3.86 million on average worldwide. This is a staggering amount that can easily shut down a small- and medium-sized business. A cybersecurity insurance policy can cushion the devastating blow of a data breach by providing coverage that protects businesses from internet-associated risks. These are risks related to IT infrastructure, information governance liability, and data collection, management, and storage, among other things.
Now that the pandemic has driven the majority of businesses to be even more dependent on cloud computing and other internet-based solutions, data breaches may become the norm. That makes getting a cybersecurity insurance policy all the more critical.
Must-have cybersecurity insurance policies for your business
The best cybersecurity insurance plan for your company is one that will allow you to protect your most critical assets. Below are the types of cybersecurity insurance protection your organization must have:
Network security – This coverage is essential for any company that handles personal information or sensitive data, as it covers costs related to network security failure, which comprises data breaches, malware infection, or business email compromise.
Network security coverage includes first-party costs or the expenses that businesses directly incur as a result of a cyber incident, such as legal expenses, IT forensics-related expenses, and costs of negotiating and/or paying the ransom in case of a ransomware attack. It also shoulders costs associated with rebuilding an organization’s public image, such as those spent in data restoration, breach notification to consumers, public relations, credit monitoring, and identity restoration.
Privacy liability – This coverage protects businesses from liabilities caused by a cyber incident or a privacy law violation, including third-party costs arising from contractual obligations or regulatory investigations by governing bodies.
For example, if your company gets involved in a consumer class action litigation due to a data breach and needs to fund a potential settlement, a privacy liability policy can cover the necessary cost. What’s more, if your company gets involved in a federal or foreign legal investigation due to issues concerning privacy, your policy will cover legal expenses, penalties, or fines that arise from such investigation.
Network business interruption – If your business is largely dependent on technology to remain operational, then this coverage is critical for you. A network business interruption policy covers lost income and associated costs in the event that a cyberattack or data loss renders the policyholder unable to conduct business. When you or a provider you rely on to operate experiences downtime because of a cybersecurity incident, your insurance policy will cover all the primary and related costs incurred for the entire duration that your business was non-operational.
Tech errors and omissions (Tech E&O) – This a must for any business that provides a technology-related service, such as hardware dealers, storage providers, or website designers. This policy protects these organizations from shouldering the full costs of claims of negligent actions or inadequate work that leads to financial loss.
For example, if a client sues a technology firm for recommending inadequate IT solutions that led them to fail meeting project deadlines, tech E&O insurance will cover both court costs and settlement costs as specified by the policy.
What is not covered by cybersecurity insurance policies?
Cybersecurity insurance policies usually do not cover potential future lost profits. Neither will they shoulder the costs of upgrading a business’s technology systems after a cyberattack. But each policy is unique, so always read the fine print of your policy to know which costs are covered and which ones are not.
Getting a cybersecurity insurance policy is just one way you can protect your company from cyber threats. Another way is to partner with Complete Technology. We offer a suite of comprehensive IT solutions for an all-inclusive price. Learn more about how to protect your business with our FREE ebook, “3 Essential types of cybersecurity solutions your business must have”. Download your copy now.