Will That Be Covered? A Closer Look at Cyber Insurance Coverage

Technology is always evolving, however, these rapid advancements bring new risks along with their rewards. Protection is key for modern businesses to maintain operations and promote productivity. That’s where cyber insurance coverage comes in.

Whether you’re looking for small business protection or a comprehensive enterprise solution, having these safeguards will keep you better covered. But what is cyber insurance exactly, and who can it benefit? Let’s take a closer look at this type of insurance and what it covers.

Cyber Insurance Coverage: Defined

Cyber insurance is an insurance plan meant to protect and cover your business if your customers’ information is caught in a data breach, malware issue, email hack or other internet-based security attacks. This type of insurance is also called cyber security insurance or cyber liability insurance. 

Cyber insurance coverage helps businesses deal with any financial losses due to these cyberattacks that affect customer information, from credit card numbers to health records.

What Does Cyber Insurance Cover?

Cyber insurance, like most insurance plans, involves particular areas of coverage. Knowing what to expect can aid in which policy you select, so keep that in mind when shopping around. Most plans will include:

• Business interruption and/or loss of revenue caused by a breach
• Computer fraud
• Data loss, recovery and recreation
• Cyber extortion
• Loss of transferred funds

If personal information is stolen during the attack, other important features included in cyber insurance coverage are:

• The cost of notifying customers is covered and handled, removing the need for internal investigation and giving notice to potential victims.
• The handling of civil damages, which is especially beneficial for small businesses dealing with class action lawsuits as a result.
• The covering of costs to hire computer forensics consultants to investigate the data breach’s scope and prevent further damage.
• Assistance in dealing with your brand’s reputational fallout after a breach, helping to mitigate the cost usually incurred by PR experts.
• Paying for victims’ insurance policies.

There are certain things it doesn’t cover, however, such as reimbursement for future profits caused by a breach or lawsuits against your business for vulnerabilities in your system before a cyberattack happens. 

It’s important to go through with a fine-tooth comb the coverage included in your particular policy. Also, consider intellectual property policies to protect your business assets in case of a security breach.

Who Needs Cyber Insurance?

Since traditional business insurance policies lagged behind technology, cyber insurance arose in the industry to fill this critical need and increase data protection. If you’re a business without cyber insurance coverage, you’re at risk of cyberattacks and liability disrupting your operations — or worse. 

Though you may think as a small business that you’re less likely to deal with a security breach, studies show small businesses tend to have higher numbers of data breaches. As a company that uses any sort of customers’ personal and digital information, it’s a smart practice to protect your business and your clientele from cyberattacks. 

This is especially crucial for companies that store customer data, such as names, addresses, credit card information, Social Security numbers, driver’s license numbers and more. Keeping this information secure is instrumental to maintaining brand trust, and its protections for both you and your customers are invaluable should you be exposed to any breach risks.

Benefits of Cyber Insurance

While cyber insurance coverage is relatively new compared to other insurance policies, it’s advantageous – and often required – for any company working with internet-based services and sensitive customer information. It can provide peace of mind and a level of quality with your business that competitors may not be offering. 

Though there are many reasons to have cyber insurance for your business, here are the key benefits:

• Build a more credible and trustworthy reputation
• Increase security for your business and your customers’ information
• Receive reimbursement for loss of income during a security breach
• Decrease business operations interruptions
• Protect against liability claims or privacy infringements from cyberattacks
• Put data encryption protocols in place
• Choose from a variety of cost-effective options

Safeguard Your Data and Assets

Simply put, cyber insurance can offer a wide range of protection and support that your business will need to thrive and prosper. Anything from viruses to security breaches could damage your reputation, income stream and customer trust, so by preparing for the worst-case scenario, you’re setting your business up for added stability and safety. 

At ArcLight, we’re all about strengthening cyber security to enable productivity. Book an appointment to see how we can enhance your business with a robust security strategy.