Home Business What Is Cyber Insurance, and Does My Business Need It

What Is Cyber Insurance, and Does My Business Need It

What Is Cyber Insurance, and Does My Business Need It

Sadly, cyberattacks have become commonplace in the US. Many businesses are finding themselves at the mercy of threat actors whose criminal endeavors have enabled them to steal data thought to be protected and are demanding ransoms for the safe return of the data.

In fact, with 98% of businesses saying they hold some sensitive data on the general public and more people working remotely and accessing public wifi and 5G networks, this is an increased vulnerability that needs addressing to prevent or minimize the risk of a cyber attack. Ideally, you will already be using the services of an IT company in Indianapolis to help you put effective security measures in place.

What is cyber insurance?

Cyber insurance is intended to cover you for violations of data protection laws (where insurable by law) and your liability for handling data. Cyber liability insurance can also cover you for extortion, system rectification costs, as well as public relations expenses, and financial loss due to system downtime.

Cyber insurance premiums can vary depending on different factors, including but not limited to;

  • Industry
  • Employees
  • Current cybersecurity protections
  • Revenue
  • Type of sensitive data you hold

When looking for cyber insurance, your IT company in Indianapolis can assist you with finding a reputable company that can cover your needs. There are two different types of cyber insurance available;

  • First-party coverage: Covers financial losses directly incurred by the business, such as lost income during a shutdown.
  • Third-party coverage: Pays for losses caused by other people affected by the cybersecurity incident, such as a customer using a company after identity theft.

How do you know if you need cyber insurance?

Typically if you hold any digital data that can be used to identify and impersonate a person, you need cyber insurance. Working with an IT company in Indianapolis can help you ascertain the type of data you hold and what security protection you need to have in place. This can then form the basis for your personalized cyber insurance.

With more businesses moving to a digital way of working in 2021 and beyond, there is no doubt that cybercriminals will become more adept at stealthily implementing cyberattacks on unsuspecting companies by exploiting weaknesses in their systems.

Digital data is vital to help you run your business. You hold a level of responsibility when collecting this data, especially if it can be used in fraudulent activity should it be accessed by cybercriminals. 

With the fines growing with each new cyberattack, you only have to look at the recent Colonial pipeline hack. Can you really afford to have sufficient cyber insurance and security in place? Fines can run into the hundreds of millions, such as the Experian fine. For the outlay of an IT company in Indianapolis to provide you with security and a cyber insurance policy, it isn’t really worth taking the risk. After all, what are your alternatives?

When it comes to the value of cyber insurance policies, you may wonder if you really need them for your business. Much in the way you pay for business insurance, public liability insurance, building insurance and auto insurances, and so on for the benefit of what the policy offers in the unfortunate event of a problem, so can cyber insurance offer you this protection too.