Top 5 things you Need to Know about Cyber Insurance
For business owners in all industries the world of cyber insurance can be complex, but understanding its key components is crucial for any organization. To educate our clients, DTC is listing the top five things you need to know about cyber insurance. You will learn topics ranging from maintaining up-to-date security measures to recognizing what coverage might exclude. This guide aims to help you make informed decisions about protecting your business against cyber threats.
-
Security Measure MUST be up to date.
To secure cyber liability insurance for a company, you need to have up-to-date security measures. These measures can range from Multi Factor Authentication, to a business grade firewall, and an antivirus software. The need for up-to-date security shows insurance companies that you are putting plans in place to protect yourself should any cyber threat occur.
-
Cost of Coverage vs Cost of Breach
While cyber insurance seems like it can be a big expense for a company, the cost of a breach can be far greater. IBM published that the average cost of a data breach for a company is 4.88 million in Q1 of 2024 reporting.
-
Not Just for Large Companies
Cyber insurance is not something that only big companies need to protect themselves. Small Business should acquire coverage as well because of the financial security it can provide. While anyone can be prey to cyber threats, a small business can be at higher risk due to the lack of protections they have in place. Any small business owner should very much consider insurance for cyber threats, regardless of the industry they work in.
-
What Cyber Insurance does not cover.
While it depends on the plan you choose, there are a few similarities to things insurance companies usually will not cover in Cyber insurance.
Property damage: Insurers usually do not pay for physical property damage from a data breach or cyber attack
Self-inflicted incidents or crime: Policies may stipulate that if an employee is the cause of a crime that creates a cyber incident, your insurer will not cover the occurrence.
Protective Measures: Protective measures should be taken before obtaining insurance, and the insurer will not cover the cost of these measures. A policy will be based on these measures.
-
Ransomware Protection is Key
Your data is a lucrative asset. Most businesses have personal information not only about their employees, but clients as well. Threat actors attack mostly for a monetary gain of cyber extortion. Having ransomware protection in place helps should a breach ever happen, and you need to recover your data.
Cyber insurance is a crucial consideration, if not mandatory, for companies of all sizes, as it provides essential financial protection against the potentially devastating costs of data breaches. By staying informed about coverage options, understanding exclusions, and implementing strong security measures, businesses can better protect themselves from cyber threats. Investing in cyber insurance is a proactive step to ensure protection and peace of mind, as in today’s evolving cyber landscape, it’s not a question of if, but when.
Related Articles: