As everyone knows, we’re living in a digital world these days. It used to be that only a few industries, such as banking, financial, and healthcare, were affected by network security breaches and other cyber crimes. Today, every business is at risk. Whether it’s internal business information such as tax records, business projections, or employee information to storing or processing electronic data like the names, addresses, drivers’ license numbers, social security numbers, medical records or credit card information of customers – every business, whether small or large - needs cyber insurance.
Cyber insurance covers the liability a business incurs in the event of a network security breach or other cyber-type attacks. The coverage generally insures against financial losses and most cyber insurance policies are divided into two categories:
- First-party coverage - that covers damages incurred by your company during a data breach
- Third party coverage - that takes care of customers, vendors, or business partners that are negatively affected in a cyber-attack on your business
What is Covered?
For first party coverage, it may include data recovery, business interruption, legal fees, and notifying customers of the breach. Third party coverage typically includes any legal fees, digital investigation costs, notification costs, and more.
Why do I Need Cyber Insurance?
You might be saying to yourself, “sure, those huge companies need it, but why would I need cyber liability insurance?” Unfortunately for small and medium sized businesses, it’s not just the large, multinational companies that are being attacked anymore. According to Verizon’s 2019 Data Breach Investigations Report, small businesses now account for the majority of cyber-attacks – 58%.
What are the Costs Involved with a Security Breach?
According to the Keeper Security and the Ponemon Institute report on cybercrime, the average attack will cost a business about $3 million. The cost of dealing with a network or security data breach includes downtime, fixing databases, strengthening internal security processes, replacing computer equipment, notifying customers, and other unforeseen costs.
How Much Does Cyber Insurance Cost?
It all depends on the size of your company along with many other considerations. Although it may seem like an added expense that you don’t want to incur, it’s critical for any business to have in today’s digital world.
Cyber security is very important and there are many facets to consider when making sure you and your business are prepared. Visit our other blogs on how to make your email more secure with end-to-end-encryption along with many other interesting topics.
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