As Murphy’s Law suggests, anything that can go wrong, will go wrong. While there are risks that come with running any business, no company wants to experience financial loss because of an unfortunate incident. That’s why insurance was created: to shield businesses from the monetary damage of an unforeseen event. However, to get insurance, you must qualify for it first. If you don’t have cybersecurity or disaster recovery, you may be unable to get one of the most important types of insurance there is.
Cybersecurity Insurance
From general liability to workers’ compensation, there’s insurance for almost everything these days. What type of insurance your organization needs can vary depending on the industry you operate in. However, there are certain types of insurance every business should have. As cybercrime gets worse by the year, cybersecurity insurance has become one of those types.
Cybersecurity insurance is a coverage plan that protects businesses from cyber incidents. This can range from data leaks to full-scale cyberattacks and everything in between. Having cybersecurity insurance can help you avoid devastating financial consequences.
What Does Cyber Insurance Cover?
Most cybersecurity insurance falls into one of two categories: first-party and liability coverage. These policies protect your company in different circumstances. Here’s what you need to know:
- First-Party Coverage: A first-party policy helps with the costs of recovery. This type of plan normally covers investigations, risk assessments for the future, revenue loss caused by business interruption, and ransomware payments. In some cases, a policy may even pay for repairing your systems or providing anti-fraud services for your customers.
- Liability Coverage: If the data of your clients is compromised, your business may be liable for the damages. That’s why cyber liability insurance is important. If you’re sued by a third party, this insurance covers attorney expenses, court fees, settlements, and regulatory fines for noncompliance.
Who Needs Cyber Liability Insurance?
Every business needs cybersecurity insurance, but what type of insurance should your company invest in? If you store basic confidential information like addresses, phone numbers, and credit cards, then first-party coverage may be the right choice.
The more sensitive the data is, the more damage it can do to a customer. For businesses that hold more significant personal information, like social security numbers, cyber liability insurance may be the better option. Since liability policies cover legal fees and judgments, this plan is better suited to protect you from legal troubles.
How Does a MSP Help You Get Cybersecurity Insurance?
Most cybersecurity insurance policies require your company to have cybersecurity and disaster recovery solutions before you can qualify for coverage. While you can implement your own solutions, it’s better to get the help of an expert. Managed services providers (MSPs) deliver comprehensive cybersecurity offerings that cover all angles of your business. The stronger your security posture is, the easier it is to be approved for cybersecurity insurance.
What Are the Benefits of Cyber Liability Insurance?
When it comes down to it, cyber liability insurance is a vital part of any risk management program. These policies are tailored to meet your company’s specific needs and can offer an array of benefits. These benefits include:
- Data Breach Coverage: When a data breach happens, companies are required by law to notify everyone who was affected. Between security fixes and identity theft protection, this can be expensive. Cybersecurity insurance can help offset those costs.
- Cyber Extortion Defense: Ransomware and other malicious software can be used to withhold your data from you until a ransom is paid. With cyber liability insurance, you can recoup the losses caused by this extortion.
- Forensic Support: After a cyberattack happens, it’s necessary to investigate to understand the scope of the damage and what caused it. Depending on the policy you have, liability insurance can reimburse you for the cost of cyber forensics and consultation.
- Peace of Mind: With a risk management solution, you can rest easy knowing your company is covered financially.
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