As cyber security becomes more important for businesses, more and more insurance companies are offering cyber insurance. There are many benefits to cyber insurance, but three main ones stand out above the rest.
#1: Cyber insurance provides coverage for both third-party and first-party losses.
Coverage for third-party losses: Cyber insurance covers damages caused by a cyber attack to third-party companies and individuals who have been affected by your company’s data breach. This can include lost business profits, reputational damage, and legal fees related to lawsuits from customers, employees, or suppliers affected by the breach.
Coverage for first-party losses: Cyber insurance covers expenses incurred by your company due to an information security incident such as lost revenues, additional expenses required to restore data integrity, and additional expenses required for customer notification (such as sending emails). It also provides protection against potential fines, penalties, and legal fees resulting from regulatory investigations relating to data breaches.
#2: Cyber insurance can help you with business interruption costs if a cyberattack disrupts your ability to operate normally.
Cyber insurance can help you with business interruption costs if a cyberattack disrupts your ability to operate normally. For example, if your systems are down for several days and you can’t serve your customers, your cyber insurance will cover the loss of revenue during that time period.
#3: Having cyber insurance can give you the tools to reduce your risk of a cyberattack.
Cyberattacks are evolving every day and criminals are becoming more tech-savvy. With cyber insurance, you’ll have dedicated security professionals who work around the clock to identify vulnerabilities and keep your network safe from hackers. Your cyber insurer will keep you up to date on current events and how to prevent them. They’ll also help you respond quickly when there’s an incident so that you aren’t left exposed for long periods of time while trying to figure out how best to respond. Just as you wouldn’t spend unnecessary money on a policy you don’t need and won’t use, you also want to be sure that the cyber insurance policy you purchase is tailored to your needs. Cover what needs to be covered, but understand what’s not included, and ask for more if you need it. If a cyber insurance agent or broker cannot explain things in clear language or direct your questions to someone who can, look for another provider.