A cybersecurity insurance policy protects your business against losses from cyber incidents, like denial of service, ransomware extortion payment, system hacking, and data breaches. This coverage is vital for small enterprises that store sensitive information on their computers or online. As the frequency and cost of cyber incidents have increased, insurance companies have come up with more variants of cybersecurity coverages. Here is all you need to know:
Types of Cybersecurity Coverage
Generally, there are two types of cybersecurity coverage: first-party and liability coverage. If you run a tech business, you should also consider carrying technology-related errors & omissions coverage.
First-party coverage will provide financial assistance to help your business recover after a cyber incident. First-party coverages typically cover:
- The cost of investigating the event
- Risk assessment of potential cyberattacks
- Any losses in revenue resulting from business interruption
- Ransomware attack payments up to your coverage limits
Policies also often cover the cost of notifying the affected parties about the cyberattack as well as providing credit monitoring and other anti-fraud services. Some policies cover additional costs like revamping any systems damaged by the cyberattack.
Whether your business serves other businesses or individuals, you may be held liable for damages resulting from customer information compromised during a cyber incident. Your cybersecurity coverage will kick in if a third party sues you for damages resulting from a cyberattack.
Cybersecurity liability coverage typically covers the following losses:
- Court settlements and judgments
- Regulatory fines due to noncompliance
- Legal expenses that come with the legal proceedings
Technology Errors and Omissions
Tech-related errors and omissions/E&O coverage can protect your business if you offer technology services. Your E&O will provide coverage if a flaw in your product or services leads to a cyberattack that directly impacts a third party. For instance, if you build an app with a flaw that leads to your client’s data being compromised, the resulting damage will be covered by your E&O coverage.
Businesses That Need Cybersecurity Insurance
Businesses that store critical data on their computers or online
If you store important data like phone numbers, Social Security Numbers, credit card numbers – either in your computers or online – you’re vulnerable to cyberattacks. Thus, you should consider carrying cybersecurity insurance.
Businesses with a large customer base
Cybersecurity insurance is vital if you have a large customer base. Your policy can cover the regulatory fines you may be subject to after a data breach. Businesses are often legally required to inform the parties affected by data breaches, and your policy can also cover this cost.
Businesses with valuable assets and high revenue
High-value businesses face heightened financial cybersecurity risks because their data is often more valuable and thus attracts more expensive ransom.
What Does Cybersecurity Insurance Exclude?
- Property damage
- Intellectual property
- Self-inflicted cyberattacks or crimes
- The cost of undertaking certain protective measures
Cybersecurity Insurance in Wellesley, MA
Businesses have varying cybersecurity needs and unique risk exposures. Our expert insurance professionals will assess your needs and help you get coverage that suits them best. At CAV Insurance Agency, Inc., we will help you find a cost-effective cyber liability insurance policy that protects your business adequately.