In the digital age, where businesses heavily rely on online operations for multiple tasks, the risk of a cyberattack is ever present. Ensuring your business’s cybersecurity is important, and comprehensive cyber insurance coverage provides additional protection and confidence. Explore why it is critical to make cyber insurance a part of your business’s risk management strategy.
What Is Cyber Insurance Coverage?
Cyber insurance coverage protects businesses against losses from cyberattacks and data breaches. It typically covers costs related to incident response, forensic investigations, legal liabilities, extortion demands, business interruption, and reputational harm. Cyber insurance can provide crucial financial support when businesses experience cyber incidents.
Cyber insurance can be purchased as a standalone policy or added to existing insurance packages like business owners or commercial general liability policies. Premiums are based on company size, industry, security controls, and claims history.
What Specific Incidents Does Cyber Insurance Cover?
Cyber insurance coverage generally covers a wide range of incidents stemming from malicious cyberattacks or accidental data breaches, including:
- Hacking attacks that infiltrate systems and steal sensitive data like customer records or intellectual property.
- Malware infections that damage systems, corrupt data, or enable cyber crimes like ransomware.
- Denial-of-service attacks that disrupt online operations and block access to websites or networks.
- Social engineering schemes, including phishing emails, that dupe employees into transferring funds or disclosing passwords.
- Insider threats from authorized users like employees or contractors who abuse access to steal data.
- Physical theft of devices containing confidential business or customer information.
- Accidental data leaks, like employees emailing records to the wrong recipient.
Reputable cyber insurance providers offer broad coverage options to address how businesses can experience cyber incidents and data exposures in today’s interconnected world.
Will Broad Cyber Liability Be Included in a Typical Cyber Insurance Policy?
Yes, a typical cyber insurance policy includes broad cyber liability coverage. This covers legal liabilities, and regulatory exposures businesses may face after a breach.
Cyber insurance coverage is one of many ways to protect your business from financial loss. Read our article on risk control services and why they’re critical to safeguarding your business.
What to Look for When Purchasing Cyber Insurance Coverage
When purchasing cyber insurance, businesses must look for policies that provide comprehensive protection against various cyber threats. The best policies cover expenses related to data breaches, hacking incidents, malware infections, and even threats like social engineering scams or distributed denial of service (DDoS) attacks. Some key things to look for include:
- Data breach response coverage: This cyber insurance covers forensic investigations, legal services, notification costs, credit monitoring services, and PR crisis management if private data like customer or patient records are breached.
- Network security liability: Protects against lawsuits that may arise if a security weakness on your systems leads to a data breach or cyber attack impacting third parties.
- Cyber extortion: Provides coverage if your systems or data are compromised and held for ransom by cybercriminals.
- Reputation harm: Your cyber insurance coverage covers lost income due to reputational damage after a cyber incident.
- Cybercrime: This can cover direct losses due to hacking, fraud, or scams targeting your accounts or systems.
- Business interruption: Covers income lost if a cyber event disrupts your systems.
What Are the Essential Features of Cyber Insurance Policies?
While specific cyber insurance policies vary, there are some key features small businesses should look for:
- Broad coverage: A cyber insurance policy that protects against many threats, not just data breaches. Phishing, ransomware, DDoS attacks, and more should be covered.
- No general liability overlap: Cyber insurance should complement, not overlap, with general liability policies.
- First- and third-party coverage: Policies should cover your direct costs and liabilities to customers/clients after a cyber incident.
- Post-incident services: Cyber insurance policies that offer access to forensics experts, legal advice, crisis PR, and credit monitoring are ideal.
- No war or terrorism exclusions: Full cyber insurance coverage with no significant exclusions.
- No media liability exclusions: Policies shouldn’t exclude coverage for risks like defamation or copyright infringement.
- Network security liability: Coverage for legal claims related to security weaknesses that impact third parties.
- Extortion coverage: Protects against ransomware and cyber extortion threats.
How Does Cyber Insurance Integrate With Other Business Insurance Policies?
Cyber insurance integrates with other policies to offer comprehensive protection. Key intersections include:
How Does Cyber Insurance Interface With General Liability Insurance?
General liability covers physical injuries, property damage, and bodily harm claims. Cyber insurance covers data and network incidents. Together, they offer complete protection.
- General liability may cover a broken pipe that damages servers
- Cyber insurance covers data loss/restoration if the damage results in a data breach
- General liability can cover if someone slips and falls on a wet floor due to the leak
- But cyber will cover identity theft losses if the servers housed private data
The key is that general liability and cyber insurance work in tandem to cover all bases.
Can Workers’ Compensation Cover Cyber-Related Tasks?
In some cases, yes. If an employee suffers harm due to cyberwork, workers’ compensation policies can help. For example:
- Covers illness from stress after a major breach
- It may cover injuries like eye strain or repetitive motion from security work
- Could cover medical care if cyber criminals harm employee
But workers’ comp has limits. It may not cover purely financial losses from cyber events. Cyber insurance can fill gaps and provide:
- Coverage for stolen funds, fraud, or scams impacting finances
- Protection for third-party liabilities related to cyber work
- Support for lost income if systems are disrupted
The two policies together help cover incidents that harm employees or finances.
Find the Cyber Insurance Coverage Your Business Needs With the Help of InSource Insurance Group
Security breaches that result in the loss of sensitive information like credit card numbers, health records, or other personal information can result in devastating financial losses and legal fees. But with cyber insurance coverage from InSource, you protect your business from financial ruin and give yourself peace of mind. Contact us today to discuss what type of insurance policy makes the most sense for your objectives.