Every business that relies on the Internet in some way is at risk of some kind of cyberattack. The type of damage to the company may be wide-ranging, from minor eruptions to major costs from lawsuits and damage to the company’s reputation. Cybersecurity insurance covers many potential risks and losses that businesses face in today’s modern interconnected world.
Why You Need Cybersecurity Insurance
Scammers and hackers continue to increase and they are looking to cause problems. They generally want information about your clients – for identity theft purposes. But some simply want to hold your company’s data for ransom – demanding money before releasing your computers. Others may want to damage your network and prevent you from operating normally.
Cybersecurity insurance is a separate policy that you need to cover your networks because your standard general liability insurance will not cover it. General liability only covers bodily injuries and damage to property.
Risks to Your Network
When there is a breach of personal data in a business network, some of those people may sue you for identity theft. The insurance will cover the costs that are involved with any kind of hacking. Cybersecurity insurance can also cover the costs of any lawsuits and the legal fees involved.
Hackers can also hold computers at bay until you pay a ransom – which will allow them to operate again. Data could also be destroyed and rendered incapable of being restored. In either case, you will lose time and money. Cybersecurity insurance can also provide your business with Business Interruption coverage. This will pay for lost time and help you re-establish your business after such a loss occurs.
The Potential Risks
Your company’s computer network is always at risk and it is impossible to completely eliminate them. Having the right kind of security for your network will reduce those risks. You can obtain coverage for it and take steps to help ensure that your employees follow the correct procedures to secure your network. When there is a breach, the coverage will pay for the cost of identifying the problem (IT forensics), restoring the data, notifying your customers that suffered data exposure, covering your public relations needs, and more.
You can also get coverage for privacy liability. When data becomes exposed that is related to your customers and employees, you can be sued. The lawsuits may come from individuals or a group, and there may be fines from regulatory government agencies. When covering a breach, some insurance companies will offer free credit monitoring for the victims.
Errors and Omissions Coverage
Other problems may also occur as a result of a breach. If your company is unable to fulfill a contract because of it, having Errors and Omissions coverage will protect you if you cannot complete agreements.
The Potential Cost of a Breach
A breach in your computer network could end up costing you many thousands and even millions of dollars – if you are a large company. This means that a breach could put you out of business.
When buying a cybersecurity Insurance policy, investigate it carefully to ensure that it will cover you in events that are particular to your needs. Seek to avoid coverage that is not likely to apply and be sure to understand what the insurance will or will not cover before buying.