Things to Look for in a Cybersecurity Insurance Policy

Whether you want to admit it or not, the world wide web is a dangerous place. Hackers and cybercriminals lurk everywhere in hopes of pillaging your inbox, stealing your customers' personal data and exploiting ill-gotten financial information.

These kinds of attacks can cause irreparable harm to your organization and might even damage your reputation for years to come. Regrettably, some small and medium businesses (SMBs) never recover from a cyberattack and are forced to declare bankruptcy. All that handwork and dedication into building a company, just to see it go und... It's a tragedy.

Luckily, you don't have to take this sitting down. You can defend your company against financial ruin by investing in a cyber insurance policy from trustworthy provider.

But what should you look for in a cybersecurity insurance policy? CyberPolicy has the answers!

Cyber Insurance: What You Need
According to Kaspersky Labs, a security breach typically costs a small business between $38,000 and $55,000. Can you imagine paying that out of pocket? Cyber insurance, much like business insurance, is intended to mollify business losses that occur due to data breach or cyberattack.

It's important to note that there are essentially two types of cyber insurance policies: first-party and third-party coverage. The former covers immediate response costs associated with a data breach for losses to the policyholder. It will cover things like:

  • Extortion
  • Ransom
  • Loss of income due to business interruption
  • Theft
  • Property damage

Third-party coverage, on the other hand, covers the policyholder from claims brought by third parties such as customers and clients claiming losses because of policyholder's actions in the event of a cyberattack. This will cover things like:

  • Legal fees
  • Settlements
  • Media liability
  • Privacy liability
  • Credit monitoring
  • Restitution fees

Neither policy is necessarily "better" than the other by default. It really depends on your organization's needs more than anything else.

Now you understand the basics of a cybersecurity insurance policy, but you might still have some unanswered questions. Below are some of the most common questions we encounter regarding cybersecurity insurance.

Can cyber insurance secure my business?
No. Insurance is not a substitute for proper security measures and you may, in fact, be required to meet a certain level of security before purchasing a plan.

Do I need a cyber insurance policy if I've invested in security measures?
Yes. There is no such thing as a perfect security system. If you are breached, cyber insurance can be your safety net.

Is cyber coverage expensive?
Nope! You will likely spend about $150 annually on insurance depending on your needs and policy.

Do I need an in-house risk management team?
Not really. Most insurance policies are designed to work around this.

Will my insurance provider check on the safety of my network?
Yes. Providers are happy to regularly provide advice to strengthen your network.

Is it a requirement by law?
No. This is optional in all states.

Will my insurance be frozen if I'm late on my premiums?
No, but your premiums may increase as a result.

As you know, anything can happen. That's what insurance is for! Ensure your organization isn't taken for a wild ride (financially speaking). Get your free small business insurance quote by visiting CyberPolicy today!

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