Cyber Insurance is Not Cyber Security
Most companies require some information from their customers in order to transact business. This data can be very sensitive and our clients expect us to protect that information from being acquired by unauthorized entities.
To do this every business should have comprehensive cybersecurity programs in place, including antivirus and ransomware protection, encryption software, password managers and two-factor authentication to protect against identity theft.
Cyber insurance is not a replacement for cybersecurity. Cyber insurance deals with the consequences of what’s happened, not with preventing an attack in the first place. It’s designed to get your business back on its feet as soon as possible, with minimum disruption and expense to you. It’s the cure, not the prevention.
Internet-Based Liability and Risks
There are generally two levels of cyber liability coverage to protect businesses and individuals against internet-based liability and risks. First-party coverage encompasses direct losses to a business or individual, whereas third-party coverage extends to claims and legal action taken by customers, partners or employees.
Cyber insurance policies vary, but generally they help pay for:
- Hiring forensic experts to investigate an incident.
- Dealing with ransomware attacks.
- Repairing, restoring or replacing systems, data and websites damaged by a hack.
- Covering the costs of lawsuits, regulatory fines and penalties.
- Restoring your business so any losses are minimize.
- Hiring public relations professionals to prevent damage to your reputation.
- Paying for credit monitoring for affected clients.
- Covering profits lost through fraudulent wire transfers.
Is Cyber Insurance Worth It?
There aren’t many firms that don’t depend on the internet to conduct some aspect of their business. Because of this we are all susceptible to cyber criminals ever more aggressive tactics to penetrate our firewalls and gain access to our records.
Insurance providers offer a wide range of options in creating cyber insurance policies that give their clients peace of mind and insure against losses from cyber attacks and data breaches that can severely impact a company. A policy that protects those areas where you are mostly likely to be affected can mitigate losses from the growing frequency and severity of cybersecurity incidents.
Need Some Advice?
One of the Mitchell Agency’s representatives would be happy to go over the cyber insurance options that are available to see if this type of coverage is appropriate for your business. Give us a call at 765-742-1135.
Infographic sources: Kaspersky IT Security Risks Survey 2015, Allianz Risk Barometer 2016, Net Diligence 2015 Cyber Claims Study, Insurance Journal