Whether you have built your business from the ground up, or expanded on the work of those who came before you, you understand that it is worth protecting.
In the age of information technology, as you surely understand, that challenge is more serious than ever.
You know the value of cybersecurity.
You've heard stories about how devastating a data compromise or the theft of personal information can be.
Maybe you have even been the victim of these kinds of crimes yourself.
But after decades of war between information security professionals and hackers, one thing is clear: data will always be at risk no matter how hard we strive to protect it.
There will always be cutting-edge weapons in the cyber security war that exploit weaknesses in the latest defenses.
Therefore, there is only one response, and that is to mitigate the risks rather than working strictly to prevent them.
Just as we can never guarantee that an automobile accident won't happen, we can’t guarantee that even the strongest cyber security tool set won't be breached.
Further, just as the rational response to the risk of an automobile accident is to invest in an insurance policy, so, too, is cybersecurity insurance rapidly becoming an industry best practice when it comes to defending your business from hackers.
Here, we will explore the benefits of cyber insurance, discuss what it can do for you, how it can save you money and time, and cover the many ways it can complement an existing cyber security toolset.
Cybersecurity insurance is like any other type of insurance.
It is a way to secure financial compensation in the event that you incur losses that cannot otherwise be prevented with certainty.
Like any other insurance policy, a cyber insurance policy is something for which you will pay a monthly premium based on your risk profile.
The average cost of this type of protection is approximately $140 a month.
Your premiums go into a pool that is paid into by other cybersecurity insurance policyholders.
When the holder of such a policy suffers losses from a cyber attack, they can receive compensation from the insurance provider.
It's important to keep in mind that once your data has been compromised, a cyber insurance policy cannot restore the integrity of the data.
It can only provide monetary compensation for your financial losses resulting from a cyber attack.
For example, if your social security number is stolen, cyber insurance cannot restore the security of that data.
It cannot prevent hackers from using your SSN once they have it; only law enforcement can do that.
A cyber insurance policy can only ease the financial burden caused by the loss of personal information.
However, as you work to reestablish the integrity of your data, pursue legal recourse, invest in more data security, and replace lost capital, the payout for your claim will help make the burden easier to shoulder.
In other words, cyber insurance does not stop your information from being attacked, but it can soften the blow, or even neutralize the cost completely.
In a typical insurance claim, payments for damages go toward replacing lost or stolen property, paying for medical bills, recovering financial losses, and the like.
When it comes to cyber insurance, it is more profitable to talk about what can't be covered than it is to discuss what can be covered.
This is because the list of limitations to this kind of coverage is much shorter than the list of its benefits.
The good news about the benefits of cyber insurance is:
For now, let's take a closer look at the reasons to invest in a cyber insurance policy.
Over and above the protection you get from technological cyber security protection, cyber insurance covers you in the likely event that one or more attempts to hack your network succeeds.
It is at that point when cyber insurance coverage kicks in to cover your losses.
Without it, you will effectively have no protection at all against the most advanced and sophisticated attacks.
Financial reimbursement is just the start of the benefits of this type of coverage.
A complete cyber insurance policy will cover the following and more:
When presented with the facts about the real dangers of cyber security, many small to medium-sized business owners will begin to ask whether they need cyber insurance.
In reality, anyone who buys or sells anything via the Internet should invest in this level of protection.
But when it comes to doing commercial business online, it really is an absolute must.
That's not to say there are regulatory compliance issues at stake at the time of this writing, but there may be eventually.
That's because, as an online merchant, data belonging to your customers and your partners is your responsibility during every single transaction.
That is to say, you actually hold their data during transactions.
Sure, you may not be able to access it personally, but it does pass through your systems.
If your systems are not secure, you may be held liable for their losses.
As we have learned, the battle between hackers and online security is always evolving and accelerating.
That means your data and that of your customers and partners could be breached at any time. It is for these reasons that cyber insurance is highly recommended, especially for online merchants.
This year alone, no fewer than 10 major merchants have been hit hard by cyber attacks.
These include Target, Yahoo, AT&T, eBay, UPS, Home Depot, and JPMorgan Chase.
Even the tech giants Apple and Google took major hits to their digital infrastructure, costing them each tens of millions of dollars.
If these financial giants can't be guaranteed iron-clad data security, how much more do small businesses need to watch their backs?
You can be sure that all of these financial titans had top-quality cyber security insurance policies in place.
Without that level of protection, chances are high that your phone service would vanish, the local Target outlet would close, and Home Depot would board up its doors.
The question is, will you suffer the fate they avoid by having these kinds of policies in place?
As mentioned above, cyber insurance works like any form of insurance. Groups of policyholders pay reasonable premiums into a common fund.
When one of the policyholders suffers a cyber attack that is covered by their policy, cash is taken from the pool to cover some or all of their losses.
Naturally, due to the nature of cyber security, certain kinds of damages cannot be covered by this type of insurance.
In most cases, other types of common business and property insurance will cover those gaps.
Factors affecting the premiums you can expect to pay include the level of risk to which your company is exposed.
The level of risk will be determined in part by how complete your cyber security tools and practices are at the time of signing.
The amount of coverage you will receive will be determined by the plan you choose, the cost of those plans, and other factors determining the risk profile of your business.
In short, the greater your risk and the greater the potential cost of those risks, the more your premiums may amount to.
One of the best ways to secure the lowest premiums is to be able to show your insurance company that you take cyber security very seriously and have strong tools and practices in place to guard against it.
The first step to selecting the right policy is to fully understand and consider the risks your organization faces when doing business.
If you conduct transactions online, that is a basic level of risk.
If you are dealing with other personal information, that is yet another level of risk.
Beyond this, you should have a clear idea of the consequences of a successful cyber attack on your data and networks.
Know what your losses can be expected to amount to.
Further, you should have an idea of what a given amount of downtime will cost you.
What will it cost to replace certain pieces of mission-critical equipment?
What are the costs of being held responsible for the losses of a partner or customer?
All of these things will need to be taken into consideration when choosing a level of coverage.
What’s more, you need to work with a cyber insurance carrier that has a competitive amount of experience in this area of financial coverage.
Your insurer should be prepared to offer competitive terms, and they should have a reputation for following through on their coverage offers.
As you are aware, any type of insurance is about mitigating risk.
When it comes to cyber security, there is plenty of risk to be mitigated, and risk will only become more prevalent going forward.
That's why working with a leader in this area is crucial.
To learn more, and consult a respected professional in cybersecurity, get in touch today.
Our team is eager to learn about your unique cybersecurity needs.