Why Does My Business Need Cyber Insurance?
Cyber Insurance offers a level of protection to a company that expands over common online risks, something that the safety nets of general liability policies fail to do. Where liability policies usually cover physical injury or property damage, Cyber Insurance offers protection over your customer’s sensitive information.
If your online database were to be hacked by outside sources, not only would your company’s information be at risk, but so would the details of everyone you conduct business with. Your client’s social security numbers, account numbers, credit card details, driver’s licenses, and addresses could all be potentially compromised.
Cyber Insurance would assist you in the daunting task of informing your customers and clients of a data breach, and help with any possible data recovery after said event. Your Cyber Insurance policy would also help you with the cost of any legal fees that may follow after a breach.
What Exactly Does Cyber Insurance Cover?
There are several different aspects to a Cyber Insurance policy, the first of which delves into errors and omissions. Errors and Omissions cover insurance claims that arise from mistakes in your service performance. These can include software and online consultations, but also may extend out to professional services, such as physicians or engineers.
Network security is another coverage category within Cyber Insurance policies. A failure in your network security may expose you and your clientele to countless issues: virus transmission, consumer data theft, and cyber extortion, to name a few. Cyber Insurance may also include a media liability portion, which would help protect you and your business from copyright or trademark infringement, as well as slander and libel claims.
Why is Cyber Insurance Not a Part of My General Liability Insurance Policy?
General Liability Insurance policies protect a company from financial loss due to property damage; third party actions that may seek payment for bodily injury due to fault by your company. Many General Liability policies also protect from third party actions that seek reimbursement for the loss they have experienced due to any misrepresentations made by your company. While some General Liability coverage may attempt to cover certain aspects of cybercrime, many fall short due to the vast potential liabilities.
The reaches of cyber attack ramifications, however, are so far-reaching that the estimation for annual damage costs by the year 2021, exceeds $6 trillion dollars. Approximately 55% of small businesses have experienced some form of cyber attack upon their databases, and of those affected, 53% have reported that they were hacked multiple times.
With such a high velocity of internet crime, and more happening every day, it is crucial for business owners to purchase a Cyber Insurance plan in order to help protect their assets, their financial futures, and the personal details of their customers as well.
What Will a Cyber Insurance Policy Cost Me?
Your Cyber Insurance cost will depend on a variety of factors, including what your coverage needs and limits are. For instance, a $3 Million dollar Cyber Insurance policy will cost more than a $30,000 Cyber Insurance policy. If you happen to have a partner contract for your business that requires a higher coverage limit, you can customize your coverage on your policy so that you’re always paying only for what you need.
Who Needs Cyber Insurance?
The pool of businesses and professionals that should possess a Cyber Insurance policy is far-reaching; ranging from professional accountants and medical offices to IT and sales companies. These and more are well known for collecting and housing ever-growing amounts of personal information and financial data.
These types of businesses usually do pay more for Cyber Insurance policies because it does typically cost more to recover from a cyber incident when a large amount of sensitive data is involved.