3 Key Things You Need to Know About Cyber Liability Insurance
Data breaches and other cybercrimes are becoming way too frequent. But it's not just large organizations that are susceptible to being hacked or getting a virus. Small and medium-sized businesses are equally if not more attractive targets for cybercriminals because they typically lack the security infrastructure of a larger organization. A total of 88% of small business owners feel vulnerable to a cyberattack, according to a recent Small Business Administration (SBA) survey. If your business is the victim of cybercrime, recovery costs can be expensive, including specialized repairs and legal fees, and can severely harm your brand’s reputation. That's why cyber liability insurance can be a smart precaution for any size of business.
Below, you will find 3 key elements of cyber liability insurance, but first, let’s define it.
What is Cyber Liability Insurance?
Cyber liability insurance is a policy that provides organizations with several coverage options to help protect them from data breaches and other cybersecurity issues.
What Does Cyber Liability Insurance Cover?
Although different insurance agencies may offer unique options for their cyber liability policies, you can expect basic policies to cover costs associated with data breaches and cyberattacks on your business.
In addition, cyber liability insurance can also pay for the following if insurance providers offer the coverage:
- Regulatory fines
- Investigative services
- Data and identity recovery
- Lost income due to a cybersecurity incident
- Public relations costs to restore brand reputation
- Costs for repairing damaged computer systems and additional hardware
- Damage impacting your customers or business partners (legal fees, settlement costs and customer notification)
How Much Does Cyber Liability Insurance Cost?
According to Insureon, the median cost of cyber liability insurance is $140 per month (or $1,675 per year) for small businesses. However, the total costs of coverage will depend on several factors including,
- Your claims history
- Your network security strength
- Your company’s size and revenue
- Your company’s exposure to cybersecurity threats
- The amount of insurance coverage your company needs
- The number of people who have access to your systems and critical data
There are simple steps an organization can take to reduce not only the cost of cyber liability insurance but reduce ransomware risk, including:
Implement end-user security training
- Cybersecurity awareness and training programs, like NINJIO, offer an organization’s employees an engaging way to learn about phishing and ransomware so they can be better equipped to understand security threats and be the company’s first line of defense against an attempted breach or attack.
Enable multi-factor authentication
- Ensuring that all employees use multifactor authentication on all their accounts and that their antivirus and malware software is updated on devices can help patch up known vulnerabilities.
Review your backup and recovery plan
- It is no longer sufficient just to have data backups. Businesses should also consider backing up critical business applications, network resources and software. Backups should be stored in a secure location, so that ransomware attackers cannot encrypt or delete them.
How Much Cyber Liability Insurance Do I Need?
There is no one size fits all policy. The amount of coverage an organization needs depends on multiple factors such as company size and the organization’s specific risk factor based on its vertical market segment. It’s important to speak with a certified agent to determine an appropriate amount that meets business requirements. A few internal questions to consider when determining an amount needed for a policy:
- Does your organization collect, store and send personal data such as identifiable information (Social Security, driver’s license, etc.) or health information?
- Is your organization in a highly regulated industry such as accounting, education, legal, finance or healthcare?
Cyber liability insurance companies are requiring more compliance for businesses to qualify for an insurance policy. Business owners and stakeholders rely heavily on an IT service provider to ensure their IT infrastructure meets cybersecurity standards. Connect with your local office technology representative today to see how Sharp can help ensure your networks and systems are compliant to ensure your organization can receive a cost-effective cyber liability insurance policy.