You may think that tech companies are the only businesses that need cyber insurance. This is not the case. Most tech companies have in-house cyber security employees whose sole purpose is to secure the company’s data. If you’re a small business and/or a non-tech company, it’s unlikely you’ll have your own cybersecurity staff. Hackers know and understand this. It’s one of the many reasons you need cyber insurance, especially if your business isn’t a tech company.
Types of Cyber Attacks
When it comes to cybercrime, criminals are often one step ahead of law enforcement. This is because they commonly commit cybercrimes without leaving any physical evidence behind. The potential damage can be significant. It helps to be aware of the different types of cyber attacks. These can include:
- Malware attacks
- Ransomware attacks
- Password attacks
- DDoS attacks
- Phishing attacks
- Man-in-the-middle attacks
- DNS spoofing attacks
There are certain steps you can take to minimize the risks of some of these attacks. Even so, there are no 100% foolproof solutions. That’s why you need cyber insurance.
What Cyber Insurance Can Do For You
Many cyber insurance companies will perform a risk assessment audit before they agree to cover your company. This can be helpful if you eventually purchase their insurance because they can offer tips to improve and strengthen your company’s cyber security.
However, the bulk of cyber insurance’s value comes from its coverage. Most general liability insurance for businesses won’t cover cyberattacks. Thus, if your company were to suffer a cyberattack, you’d have to foot the bill and sort it out yourself. There are two main types of cyber insurance coverage: first-party and liability.
First-party cyber insurance covers your company’s data including employee and customer information. It should also cover expenses like:
- Extortion payments from ransomware attacks
- Incident investigations
- Any lost revenue due to business interruption
- Risk evaluation for future cyber attacks
- Legal counsel
- Customer notification
- Public relations costs
- Recovery or replacement of stolen data
Liability coverage or third-party coverage is more narrow in scope. It can protect your business if a third party were to file a lawsuit against your company. A third party might bring legal action against your company if their client’s data was stolen because of a security breach at your business. Liability coverage will often cover:
- Attorney and court fees associated with legal proceedings
- Court judgments and settlements
- Fines incurred for noncompliance with regulations
- Payments to customers affected by the security breach
- Accounting costs
- Losses due to copyright infringement or defamation
If you’re a small business, the last thing you want is to be on the hook for damages relating to a cyberattack. Getting cyber insurance can mitigate that risk and free you up to do what you love best: serving your customers.
