What Is Cyber Security Insurance And What Does It Cover?
Cyber Security Insurance is business insurance for companies that face cyber threats. In case they are hacked, they are covered for legal fees and more.
Did you know that the average cost of a cyber-attack is around $1 million?
No matter the size of your business, an expense like that can be devastating. That said, if you have cybersecurity insurance, it’s often a lot easier to deal with the financial impact of a cyber-attack.
Below we’ll explore how this insurance works and the kinds of things that it will cover. If you’re worried about the financial impact of a cyber-attack, you’ll soon discover how this kind of insurance can help you stay in business.
What Is Cyber Security Insurance?
As the name suggests, cybersecurity insurance is a form of insurance that protects you from the negative effects of a cyber-attack.
For the most part, this insurance will help you deal with first-party and third-party damages.
This can be helpful if you have to deal with a lawsuit or something similar, due to a data breach.
If you have European customers, this kind of cover is especially useful. That’s because companies that deal with European data are now facing increased legal scrutiny, because of the new GDPR law.
Another good thing about this insurance is that it can help you deal with the costs of a ransomware attack.
A ransomware attack is when a hacker installs a piece of software that renders your computer unusable. If you want to use the computer again, you will need to pay a ‘ransom’ to the hacker, and they will then uninstall the software.
With cybersecurity insurance, you’ll be covered if you pay this ransom, thereby giving you the ability to recover your files.
Do You Need This Kind of Insurance?
At this point, you might be wondering whether you should invest in cybersecurity insurance.
Well, if your business handles sensitive customer data, you’ll benefit from this kind of insurance.
Now, if you own a small business, you might think that you don’t need this insurance. However, hackers will tend to target all sorts of companies, and so don’t think that you’re safe just because you’re a small business.
In fact, hackers will often prefer targeting small businesses as they rarely take the proper precautions.
How Much Does This Insurance Cost?
As with all kinds of insurance, the true answer here is that it depends on your particular set of circumstances.
That said, here are a few of the factors that might impact how much you have to pay:
- The size of your company.
- The kind of data you store.
- The kind of industry you’re in.
- The security precautions you’ve taken.
Each of these factors can have a significant impact on your overall insurance quote.
The size of your company matters, because the bigger you are, the more likely it is that your costs will be high in the event of a cyber-attack.
The kind of data you store also has an impact, because certain types of data can get you into more trouble. For instance, if you store credit card data, you might be subject to more legal trouble if a hacker manages to steal this data.
Your industry also has a massive impact on your quote, as different sectors deal with different kinds of data. Following this, hackers will often target the industries that store a lot of sensitive data.
For instance, if you run a finance company, you’ll have to deal with a larger quote. That’s because you will likely have a lot of sensitive information that is going to be worth a lot of money to hackers.
The precautions you’ve taken can also have a huge impact on how much your quote will be.
After all, if you’ve taken a lot of precautions, the odds of you being affected by a cyber-attack are lower. The insurance company will then take this into account, and will probably give you a lower quote because you are less of a risk.
How To Improve Your Approach To Cybersecurity
If you improve the way you approach cybersecurity, you will be able to reduce the amount of money you pay for insurance.
One of the basic steps you can take is to install antivirus protection on your computer.
Now, if you own a Mac, you might be asking yourself, “do you need virus protection on a Mac?”
This is a common question as many experts say that you don’t need virus protection for a Mac. However, it’s often a good idea to install antivirus on a Mac, as some viruses can affect a Mac.
Plus, a lot of antivirus software is often bundled with a firewall too. This helps because a firewall will give you an added layer of protection from hackers.
You might also want to hire a company that specializes in cybersecurity.
If you consult with a specialist company, they’ll tell you how you can improve your cybersecurity strategy. If you act on these improvements, the insurance company might be willing to lower your insurance price.
Additionally, you might want to select an individual in your company that manages the cybersecurity side of your business.
This person will need to conduct regular checks to make sure everything is secure. They will also need to make sure other staff members aren’t making any mistakes that might lead to a cyber-attack.
Do You Need Cyber Insurance?
Sadly, cybersecurity insurance is a requirement if you want to protect yourself from the financial impact of a cyber-attack.
Many companies now offer this kind of insurance, and so you should try to shop around. In doing so, you will be able to find a policy that is right for your financial situation.
Of course, before you sign any agreements, make sure you read the fine print. If you do this, you can ensure you’re getting the correct cover, which will then mean you’re properly protected should the worst happen.
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