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What is Cyber Security Insurance and Do You Need It?

cyber security

As businesses realize we live in a time where no amount of protection can keep them safe from hackers, natural disasters, or technical failures, businesses continue to look for ways to mitigate any damages they might incur. This led to the creation of cyber security insurance.

What is cyber security insurance?

Cyber security insurance is a policy that businesses with digital presence can purchase to protect themselves and their clients from any damages that may come following:

  • Failure of their software or hardware
  • Accidental data leaks that may occur while performing their services
  • Data theft by hackers or malware

The businesses buy a third-party insurance policy to help them cover any financial losses that may come, either directly from the loss of data or indirectly following legal actions taken by their customers who find themselves victims of the data disaster.

Are there other terms for cyber security insurance?

Cyber security insurance is known by different names, including, but not limited to:

  • Cyber endorsement policy
  • Cyber insurance policy
  • Cyber liability insurance
  • Cyber risk insurance
  • Cyber and privacy insurance

Needless to say, the amount of coverage and the details of the policy vary depending on the business’ needs and the insuring companies’ policies, making it crucial that you know what you are signing up for and that you read every single page (including the small print.)

Do you need cyber security insurance?

This is a question typically asked by small businesses. Often, because businesses are small, they think they don’t have to worry about hackers or malware, but thinking this is a huge mistake that can put you and your entire company at risk.

You are a target: According to a study by the U.S. House Small Business Subcommittee on Health and Technology, around 20 percent of all cyber-attacks are aimed at small businesses with 250 or less employees. In 2016, there were 18 million new malware samples that were captured in the third quarter alone.

You have employees: While most of your employees will be honest workers looking to make an honest living, not all employees will be so forthcoming. Statistics show that about 48 percent of data losses occur due to negligence by employees and that about 5 percent of them are done by employees or former employees who had a malicious intent.

And then of course, there is always the chance you might lose data simply because your software and hardware were either not configured correctly following security guidelines or patched and updated when they needed to be.

Cyber security should be part of your security policy

As a small business owner, you will always have the security of your digital presence at the fore of your business plans. You, therefore, need to integrate a cyber security insurance policy into your security policy to complete the protection of your business and clients.

Just like you put a lot of effort into protecting your business, you should also consider a cyber security insurance policy in case things don’t go as well as you plan. Remember, even the biggest of companies that have invested millions in the protection of their data, databases and networks have found they couldn’t really keep the bad guys out.

Where can you get cyber security insurance?

If you have already made up your mind – quite wisely so – that you need to protect yourself and your clients with cyber security insurance, then all you will need to do is start your research using any popular search engine. The best of them will commonly list famous insurers like AIG and Apogee Insurance Group. Companies like PricewaterhouseCoopers (PwC) go beyond simply insuring your business and have packages that will actually work with you to secure and protect your data.

You will need to do an in-depth research into which company and insurance solution will cover you’re the best with the budget you have set aside. Hiring an expert to do the job for you isn’t a bad idea at all.

Do you need cyber security insurance?

The obvious answer is yes! Investing in a good cyber security insurance policy will mitigate some of the risk you might face down the line. As you grow bigger, you should never forget that your worth is also increasing in the eyes of hackers. So, the expression “Better safe than sorry” should be one that you take seriously.

 

 

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