The digital era has made organizations more susceptible to cyber risks than ever before. Given the risks of everything from data breaches to ransomware attacks, joining the world of cybercrime seems like an increasingly risky proposition. We are flooded with questions from business owners asking, "Does business insurance cover cyber attacks?" The answer may be complicated, but you should know that business insurance can protect your company from these risks.
Before reading further, also learn the purpose, coverage options, and how to choose the right tenants insurance!
What is Cyber Insurance?
A cyber insurance policy is a unique form of coverage that was created for businesses facing the financial consequences of data breaches and other cyber attacks. It covers expenses related to responding to and recovering from cyber-attacks (like legal fees, notification costs, lost revenue during downtime).
But cyber may not be automatically covered under traditional business insurance policies. Which is why a lot of businesses buy cyber liability insurance, a policy designed to directly deal with the types of risks that are found when they do stuff online.
Read more: Whats Tenant Insurance?
Does Business Insurance Cover Cyber Attacks?
Most standard business insurance does not cover cyber attacks, including general liability or property insurance. Such policies address coverage for hardware damage, bodily harm, and general operational risks, but they don’t factor in the unique challenges of the online environment. Protect belongings, liability issues, and more with renters insurance!
If you want to be protected against cyber sabotage, you will need a cyber liability insurance policy. This is a coverage that is tailor-made for protecting your business in the event of activities such as hacking, phishing, and ransomware. Cyber liability insurance can cover:
- Data breach costs:
If customer data gets stolen, this coverage assists with the expenses of notifying impacted clients and offering credit monitoring. - Business interruption:
If your business is temporarily shut down as a result of a cyber attack, cyber insurance can reimburse lost income during that period. - Legal fees:
If your company is sued over a cyber attack or breach of Data, this insurance may help pay for legal defence and settlements. - Ransomware recovery:
If your business falls victim to a ransomware attack, have cyber insurance in place to pay the associated costs of doing so, including paying the ransom and getting your data back.
Why Is Cyber Insurance Important for Businesses?
To make things worse, cyber attacks are getting more advanced by the day, and businesses stand to lose a lot in the event of one. This is more companies are using online services for daily operations, putting them at increasingly higher risk of a cyberattack. Cyber insurance offers a critical and much-needed safety net that can help organizations get back on their feet and lessen the financial burden of these attacks.
If there’s no cyber insurance, business owners will absorb those costs, and that can be deadly for small businesses. That’s why it is important to know your insurance coverage and whether you are covered for cyber risks. We have a variety of insurance solutions available at Summit Insurance that can keep your business safe from cyber risks.
Final Thoughts
Does Business Insurance Cover Cyber Attacks? In summary, business insurance usually does not protect against cyber attacks; you would need a designated policy, specifically, a cyber liability insurance. Business owners need to understand the distinctions between general coverage and cyber protection so that they can ensure their protection is adequate. Cyber threats are on the rise, and purchasing the correct insurance can be a necessary first step in protecting your company. This week, we’ve asked an insurance expert to tell us how we can tailor plans to meet our own unique needs.
For more information on insurance options, check out Summit Insurance Kelowna.
