Insurance

Cyber insurance

 | 
May 20, 2022

If you're running an e-commerce business or another business that handles sensitive customer information, you might want to consider purchasing insurance. When it comes to cyber insurance, there are different types of coverage available, each designed to protect your business from different kinds of data breaches, whether it's a small breach or one that puts the entire company at risk. To learn more about insurance and how it can help your company if you suffer a data breach.

What does cyber insurance cover?

A cyber insurance policy will generally cover your business for liability in case of a data breach. The coverage is similar to what you would receive for general liability, property damage, and workers' compensation if an employee at your office were to cause harm by accidentally dropping a box of files or leaving an important document on a subway platform. If your business has computers and network systems that store customer Construction Insurance information such as Social Security numbers or credit card numbers, your business could face lawsuits from customers if that information is hacked or compromised. A cyber insurance policy may help protect you financially in such situations by covering legal fees, damages, and settlement costs. Such policies can also assist with incident response expenses like hiring forensics teams to investigate how hackers breached security protocols at your company.

What does cyber insurance not cover?

The main exclusions are for losses caused by intentional hacking and for losses that occur due to an excluded peril, such as an insured's negligence. For example, if a customer's identity is stolen by a hacker and then used to perpetrate fraud against you (the seller), your policy will cover that claim. However, if you're sloppy with your information technology security or have employees who steal customers' identities or commit fraud on their own time, that claim would not be covered. It's also important to note that many policies specifically exclude coverage related to extortion demands known as ransomware attacks. These attacks usually happen after hackers gain access to a business network through malware, spyware, or phishing emails sent out by cybercriminals.

Another coverage exclusion involves business interruption. If you were forced to close your store due to a major data breach, you would probably need to spend money on hiring a temporary workforce until you could reopen. These costs are often not covered by cyber insurance policies. Policies may also exclude coverage related to a breach that's caused by an excluded peril, such as an insured's negligence, or if customers' Social Security numbers are stolen and then used for identity theft on their credit cards or loans. You'd likely be covered for that fraudulent activity, but cyber policies sometimes don't cover it. It's also important to note that many policies specifically exclude coverage related to extortion demands known as ransomware attacks.

How can you protect against cyberattacks?

As data security experts warn us of more sophisticated malware and more damaging hacks, it’s important to take preventative measures to keep your business safe. Implementing a cyber insurance policy is one way that you can protect against financial loss resulting from a Commercial Tenant Insurance data breach. Make sure to weigh any pros and cons before purchasing cyber insurance, however; policies are expensive, and most experts say they aren't worth it because most small businesses will never experience a breach large enough to cost them anything.

Cyber security is crucial for your business, but it can be difficult to prioritize when there are so many other things to deal with. If you have an appropriate business policy in place, you won’t have to worry about these issues as much. Keep in mind that policies differ significantly by the provider, so it's important to do your research before purchasing a plan. To find out more about data security and which policy may be right for you.

Does your current policy offer protection from cyber-attacks?

When it comes to cyber insurance, it’s important to ask yourself: Does my current policy offer protection from cyber-attacks? Cyber liability policies typically have a limit on what they cover, including a maximum payout per claim. What might seem like an insignificant amount of data stolen today could amount to several million dollars in stolen data and subsequent lawsuit payouts down the road. That's why many experts recommend taking a proactive approach by purchasing cyber liability coverage now before you need it later. You'll want to look for specialized coverage that protects against all known risks.

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