Cyber insurance has been around for a few years, but it’s still considered a relatively new type of insurance. That said, cyber insurance is growing in popularity among both small and large companies alike. As cyber insurance coverage is still quite new and growing, there is confusion surrounding what can be covered.
What does cyber insurance cover?
Data breach/cyber extortion
This type of coverage typically includes reimbursement of expenses when data is lost or damaged due to hacking, ransomware, or other malicious activity. Some policies will also include reimbursement costs associated with restoring or repairing the data.
If your business operations are interrupted due to a cyberattack, this may be covered under your insurance policy if you have business interruption insurance.
Network security liability
A network security breach occurs when a system is compromised in any way, allowing access to confidential information or allowing malicious software to run on the system. Network security liability covers the costs associated with restoring your business following a cyber attack.
Privacy liability is the cost associated with settling legal disputes related to privacy violations. This includes defending yourself from lawsuits filed by customers whose privacy has been violated due to a cyber-related incident (such as a data breach).
Media liability is the costs associated with responding to media inquiries relating to a cyber-related claim. This includes paying for public relations efforts after an incident occurs and providing information about how the incident occurred and what steps were taken following it.
How much does cyber insurance cost?
The cost of cyber insurance will depend on the current cyber security protocols you have in place and the underwriter. Even though cyber insurance has been around for a few years, many of the larger insurance carriers are not familiar with the underwriting process for cyber insurance. Typically, a cyber insurance policy for a small to medium-sized business will range from $400-$2,000+ annually, depending on the level of coverage required for your business.
Cyber insurance is more affordable for small businesses than you might think. There are more options for coverage, and the upper limits on your policy can be quite high. Cyber insurance is a vital tool for any business that is collecting and storing sensitive data from clients or customers, so don’t miss out on the opportunity to protect your customers and your business by choosing not to get cyber coverage.