Did you know that it can take months or even longer to recover from a cyberattack? This can wreak havoc on your business’s ability to function, causing a major loss in revenue.
When it comes to cyber liability insurance costs, you need to determine whether or not you can afford to forgo coverage.
Keep reading to learn about cyber liability coverage and what you’re risking if you choose not to be covered.
1. The Purpose of Cyber Liability Insurance
Did you know that there were almost 600 data breaches in 2018? These breaches have exposed sensitive information that pertains to well over 400 million customers and employees.
Simply put, if you have sensitive information that’s stored on any kind of electronic device or in a cloud, then your business absolutely needs cybersecurity insurance. If you experience a cyberattack, then all that sensitive information can be used for illegal purposes, such as fraud or blackmail.
In the midst of such a data breach, the only thing that will stand between you and a business catastrophe is insurance. Cyber liability policy states that the costs to recover will be handled by the insurance provider. This will significantly limit the damages done to your business.
2. First-Party Coverage
There are two main types of cyber liability coverage that you can get to fully protect yourself and your constituents in the likely event of a cyberattack.
First-party coverage is the type of insurance that can take care of time-sensitive damages that stem from a data breach. Immediate expenses can include repairing electronics, maintaining your brand’s reputation, contacting your employees and customers, and more.
Some hackers might demand a ransom from your business after taking control of your data. This is another immediate expense that could be taken care of by first-party coverage.
Plus, there will be a range of costs that will stem from delayed business operations and lost revenue. However, this is only the tip of the iceberg when it comes to those immediate damages.
3. Third-Party Coverage
The other type of cyber liability coverage is called third-party coverage. This will take charge of expenses that relate to defending you and your business against various legal claims and lawsuits. Upset customers or even employees could file a lawsuit which claims that you’re responsible for the breach of privacy.
If there is some negligence on your part, you might have to pay one or more regulation fines. As if that wasn’t enough, you could be sued by the media for libel, slander, copyright infringement, and more.
Keep in mind that cyber liability insurance policies can have a lot of variety between providers. With this in mind, it’s always important to do thorough research about a provider and its policies. That way, you can make sure the coverage you get is the exact coverage you need.
As a bonus, some insurance providers can offer you risk prevention guidance by identifying weak spots in your defenses and helping you identify threats before they get out of control. Some providers even have a hotline that can be activated in the event of a data breach. This can allow customers, employees, and the general public to feel more informed and calm about the situation.
4. Are There Policy Exclusions?
The last thing you want to do is pay for coverage that won’t actually do much when the crucial moment comes, which is why you’ll need to pay close attention to what you’re buying. While policies can vary on a pretty large scale, there are certain damages that are generally not covered by any cyber liability policy.
One common exclusion is the loss of property, such as electronics. For instance, if a burglar breaks into your business and steals all of the monitors and computer towers. This is something that should be covered by commercial property insurance rather than cyber liability insurance.
When it comes to employee theft and other types of criminal activity, you can expect to be covered by commercial crime insurance only.
Your cyber liability insurance may cover social engineering to a degree but it depends. Social engineering is a situation in which a cybercriminal uses various virtual tricks to get an employee to transfer company money to them.
The last aspect that most likely won’t be covered by the average cyber liability insurance policy is property damage and bodily injury. These kinds of damages are covered by general liability insurance instead.
5. How Much Is It?
When it comes to deciding if cyber liability insurance is worth the cost, you’ll need to weigh the price of getting it versus not getting it.
Of course, there is no one set price for coverage. The price is going to depend on a variety of factors, so it could be anywhere from around $500 to tens of thousands of dollars annually. Compare that with the cost of a cyberattack, which can be hundreds of thousands or more.
A small business is going to need to work with a provider to generate a policy that reflects their needs and their overall situation.
If you limit who has access to sensitive data, this could decrease your policy price. On the other hand, if you have a multitude of servers that store a wealth of sensitive data, you can expect the price to increase.
A coverage broker can walk you through all the details so that you can have the right plan.
Cyber Liability Insurance Cost Is Worth It
Now that you know all about the risks involved with cyberattacks, you can see that cyber liability insurance cost is worth the peace of mind that it will give you.
Giga Solutions can provide your business with PEO solutions, commercial insurance, and everything else you need to run an efficient and protected business. Whether you need cyber liability insurance, commercial auto insurance, commercial property insurance, or all of the above, we’ve got you covered.
If you have any questions about our highly-rated services, feel free to contact us. Our knowledgeable experts are always happy to help out.
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