In this day and age, where your cloud assets are exposed to potential harm, cybersecurity insurance seems to be a sound investment. Big corporations have it, but as a small business, does it pay to have the same policy?
Like homeowner’s insurance, a cybersecurity insurance policy will protect you financially should a hacking incident compromised your system and revenue. In this post, we will weigh if it’s the right choice for your company.
What is cybersecurity insurance?
This policy covers the cost of recovering from a cyberattack or data breach. It applies to small to large companies who want added protection and peace of mind for their assets.
Just like any policy, cybersecurity insurance has a list of inclusions and exclusions as well as special clauses that trigger the application of specific provisions.
Who should use this?
Basically, every business that stores and handles confidential and sensitive data should avail cybersecurity insurance. This coverage will act as the first responder in the event of a data breach.
Take note that data breach can happen in different ways and forms. You must invest in a policy that covers your needs and your type of industry.
What does it cover?
The coverage will vary from one insurer to another. Still, most of this insurance type will have the following coverage:
It includes the direct cost of the breach within the company. Some examples are repairing damaged hardware/software, cost of notifying customers and the public, business interruption loses, extortion money that the hackers could demand, and so on.
This includes the defense expenses of privacy lawsuits from customers and stakeholders, media liability claims, regulatory body fines, negligence claims, and more.
As you see, a data breach can put your business in turmoil. A cybersecurity insurance policy can cover a lot of expenses if not all.
What’s not covered?
Again, this will vary depending on your insurer. Still, the following are some of the general exclusions:
*Criminal activity – robbery, fraud, employee theft, and the likes aren’t included in the policy.
*Property damage claims – it doesn’t involve physical and property damages.
*Loss of property – if you lost a phone or computer, this will be covered on your commercial insurance policy.
*Social engineering – tricking people into transferring funds or information isn’t usually covered. Basically, it’s not qualified as hacking or deception.
*Since data breach on small businesses is rampant, this policy is added protection for your business, at least financially.
*You’ll have something to start within the aftermath of the attack
*It’s a plus point on your compliance on regulatory bodies
*Not all insurers offer the same level of coverage. Also, this policy is new to the market and yet to be improved.
*The insurance policy doesn’t reduce the reputation damage of the hacking. It only covers you financially.
As a small business owner, it pays to secure your system through all means possible. If you have the budget, you should consider investing in a cybersecurity insurance policy.