Waiting to Get Cyber Risk Insurance?
Cybercriminals today cause organizations a lot of damage through their cyberattacks. Your firm’s survival may rely on it having cyber risk insurance. Are you waiting to get cyber risk insurance? Discover what it is and what it covers.
Statistics show that U.S. companies incur a cost of $8.64 million on average after a cyberattack. This expense is because of direct financial loss, legal fees, reputation damage, downtimes, and penalties.
Many small and medium organizations cannot bear the costs of cyberattacks. Some cannot return their entity to its earlier position, and they go out of business.
Can your organization survive this substantial expense?
Clients often ask BC Networks whether cyber risk insurance can help them if they are victims of a breach. BC Networks provides IT services and support. This article will help you discover what cyber risk insurance is and why you need to get it.
What Is Cyber Risk Insurance?
Cyber risk insurance — also referred to as cyber liability insurance coverage (CLIC) or data breach liability insurance — is a stand-alone insurance policy. It helps businesses cover recovery costs after a cyberattack. It covers:
- Investigation: A forensic analysis is necessary to know what happened, damages incurred, and how to prevent the same breach. You may involve a third-party and coordinate with law enforcement, which can lead to expenses. Your organization can turn to the insurance policy for such costs.
- Business Losses: The cyber risk insurance may cover risks covered by an errors and omissions policy, such as errors caused by negligence. It may also cover monetary losses caused by downtimes, repairing reputational damage, and managing the breach.
- Privacy and Notification: The insurance policy can cover the cost of notifying stakeholders of the breach. This activity is a legal requirement in some industries. You may also enjoy the cover for the costs of monitoring various platforms to see if the cybercriminals are using your information. For example, you may need to hire temporary staff to see if anyone uses your clients’ credit information in their transactions.
- Extortion and Lawsuits: Attackers can steal your data and ask for ransom before returning it. You may use cyber risk insurance to pay this ransom demand. The insurance policy may also extend to cover legal fees you may incur after persons whose privacy the attackers compromised sue your organization. You may also use it to settle regulatory fines and make settlements with aggrieved parties.
Many insurance firms offer cyber risk insurance. These institutions may provide varying covers, and they may need different premium amounts.
Finding the Right Cyber Risk Insurance for Your Organization
What should you look for as a cyber risk insurance buyer?
Many insurance firms have added cyber risk insurance to their insurance policies. Choosing the right fit can be challenging.
These tips can help you settle on the right insurance firm.
- Ask What Their Insurance Policy Covers: It should cover the areas above and more.
- What Are Their Deductibles? Compare deductibles of various insurance firms before choosing one.
- What Type of Cyber Insurance Does Insurance Company Offer? A stand-alone policy may be the best and more comprehensive option. You may also ask them if they can customize their coverage to the needs of an organization.
- How Long Does the Cover Last? Some risks, such as advanced persistent threats (ATPs), may take longer to resolve.
- Does the Insurance Cover Social Engineering and Network Attacks? Attackers use social engineering techniques to target organizations in various scams, such as phishing and ATPs.
- Does the Insurance Policy Cover General Attacks or Only Those Targeting a Specific Organization?
- What Are Their Premium Amounts? Choose an institution that offers the cover you need and has affordable premium plans. You may default on an expensive option, which can cause you many issues, such as the insurance policy not covering the costs of a cyberattack on your organization.
- Does the Insurance Policy Cover an Employee’s non-malicious Actions? You may need this coverage in the cyber risk insurance policy.
- Does the Cover Extend to Third Parties? Your partnerships with other organizations can expose you to some cybersecurity risks. Ask the insurance company if these threats are in their insurance coverage and the implications if the third-party has a separate policy.
Why Get Cyber Risk Insurance
Is the cover necessary? Yes. It can help you remain open after a cyberattack, as your business might close if it pays the breach’s costs. This cover can only help you if you have it before the attack.
BC Networks offers IT services and support. We provide cybersecurity, cloud technologies, managed IT service, and more.
We can help you get the right cyber risk insurance cover. Our experts will analyze your risks and find the right insurance policy to help you if cyberattackers attack your IT infrastructure.
Are You Ready for Cyber Risk Insurance?
The costs and risks to businesses lacking adequate security continue to rise.
Contact BC Network if you would like to learn more about how you can protect your business.