The Importance of Cyber Insurance for your Business
How it affects your business
Cyber Insurance is more than just a level of protection for your business’s online systems against hackers. Some, especially small businesses, don’t realize the danger they are in until it is too late. Let’s take a look at what Cyber Insurance really is and how it could prevent damage to your business.
What is Cyber Insurance?
Cyber Insurance offers protection for a data breach involving sensitive customer information such as credit card numbers, account numbers, driver’s license numbers, health records, and even their Social Security numbers.
Common Cyber Threats
According to cisa.gov, ransomware is a form of malware designed to encrypt files on a device, rendering any files and the systems that rely on them unusable. Malicious actors then demand ransom in exchange for decryption usually. Cyber Insurance can put actions in place where it can prevent hackers from accessing your files and it can also help if they do happen to access them.
There’s no denying that cybersecurity and business continuity go hand in hand. Data breaches have been proven to devastate a successful small business, even go as far as to run it OUT of business due to lost data, compromised personal information of the clients, and many other challenges. Unfortunately, dealing with a data breach is financially devastating long term. According to Ponemon Institute, companies pay on average 67% of the total cost of the breach within the first year of the breach occurring. Some small businesses are unable to recover from this financial loss but even if they do, they hardly ever recover from word of mouth.
What Cyber Insurance Can Offer Your Business
What’s unique about the privacy and network security coverages is that both first-party costs and third-party liabilities are covered: First-party coverage applies to direct costs for responding to a privacy breach or security failure, and third-party coverage applies when people sue or make claims against you, or regulators demand information from you.
Some common first-party costs when a security failure or data breach occurs include:
Forensic investigation of the breach
Legal advice to determine your notification and regulatory obligations
Notification costs of communicating the breach
Offering credit monitoring to customers as a result
Public relations expenses
Loss of profits and extra expense during the time that your network is down (business interruption)
Common third-party costs include:
Settlements, damages and judgments related to the breach
Liability to banks for re-issuing credit cards
Cost of responding to regulatory inquiries
Regulatory fines and penalties (including Payment Card Industry fines)
Cyber Liability coverage can also provide you with access to professionals who can help guide you through how to handle a breach, minimize losses, and when necessary, handle demands for ransom.
The best way to make sure that you are getting the best insurance for your boat is to work with an experienced boat insurance broker who can help you navigate the many details and options available. Our professional staff here at Danskin would be more than happy to sit down with you and discuss which insurance would fit you the best. If you’d like to learn more about Cyber Insurance, visit our website or call us today at our Wall Office at 732.449.3800 or our Jackson Office at 732.364.4600.