7 Things Business Owners Need to Know About Cyber Liability
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7 Things Business Owners Need to Know About Cyber Liability
Did you know that 60 percent of businesses close within 6 months after a cyber attack? Even though experts have developed new methods to protect companies against these incidents. The number of cyber attacks isn’t expected to decrease any time soon.
You may think that getting a new antivirus is enough to protect your business. But, this isn’t enough to relieve your company from responsibility and liability in these attacks.
Cyber attacks cause more than technology issues. Many businesses close after receiving cyber liability claims due to financial constraint from losing accounts, reputation, among other consequences. Owning a cyber liability insurance policy for your business can protect you when these unexpected attacks happen.
Not sure why you should consider getting your own cyber liability coverage? We have you covered. We’ll discuss must-know facts about cyber liability and why you should consider getting this coverage for your business.
Cyber Liability: The Right Insurance Coverage to Protect Your Business
Before going into need-to-know facts about this type of coverage, we’ll discuss the basics. What is cyber liability insurance? This insurance protects in the event of cybersecurity claims.
These events include data breaches, content liability, network failures, among other cyber attacks. You may think your business is immune to these claims because of the size of your company and the clients you help.
In today’s technology-driven industry, cyber liability coverage is a must. Every day, businesses big and small handle confidential and sensitive information that could be exposed during a cybersecurity attack. When a breach occurs, businesses are liable for the exposure and damages caused by the attack.
Obtaining a cyber liability insurance can protect your business in these claims. Maybe you have considered getting this type of coverage for your business but, aren’t sure if it’s the right call.
Here are 7 facts you must know to get the right cyber liability insurance coverage.
1. There’s More Than One Type of Cyber Liability Coverage
There is more than one type of cyber liability insurance. The two types of cyber liability coverage are first party and third party. The first type protects from losses suffered by the insured due to the cybersecurity breach.
Today, many businesses outsource services and systems to lower operating costs. A third party cyber liability policy will protect from breaches that occur at the third party company that handles your business data.
2. What Does Cyber Liability Insurance Cover?
Typical, cyber liability policies cover most business losses and customer related costs. Some examples of covered costs are notifications of the data breach, restoration of your computer systems, lawsuits and class actions resulting from the incident, among other related costs.
Many insurers offer policies that include first and third party coverage. But, it’s recommended that you read your policy to know the costs your insurer will cover.
3. What Type of Insurance You Need
All insurance policies are based on risk. To find out the right type of cyber liability coverage for your business, you must conduct an analysis of your business assets and operations. It’s important to take a look at your current practices for handling all sensitive data.
If you aren’t sure how to conduct this analysis, you may consult cybersecurity experts and legal counsel. They can provide insight into your practices and how to improve your current policies. Based on your analysis, you’ll be able to determine if your business needs a first party, third party or both types of coverages.
4. Changes in Your Business Can Help Lower Policy Cost
Making changes in your daily operations can help lower your policy cost. Implementing the best cybersecurity practices and policies in your business can reduce your policy cost. Another way to lower your policy premium is by developing a great recovery plan to prepare for any cybersecurity breach.
Besides protecting your business, implementing these tactics will help your business recover faster from a cyber attack. These strategies will show your insurance carrier that cybersecurity is your top priority.
5. Getting a Cyber Liability Insurance Policy
The process to obtain this type of insurance is the same as for any other insurance policy. You will submit your information to the insurer.
Their underwriters will analyze your business policies and risk. They will issue the policy based on the analysis and information available about current cybersecurity risks.
6. Policy Prices May Vary from Year to Year
When it comes to cyber liability insurance, policy premiums may fluctuate a lot on a year to year basis. This type of coverage doesn’t work like others that base their pricing on usage. The number and severity of the cybersecurity events that happen every year will influence your policy pricing causing year to year fluctuations.
7. Many Companies Are Requiring Vendors Cyber Liability Insurance
Every company you hire to handle your data poses the risk of cyber liability claims on your business. Cybersecurity attacks such as the 7.ai data breach that exposed customer information from companies like Best Buy and Sears have put companies on high alert.
Many companies are asking vendors to obtain their own cyber liability insurance coverage. You should consider getting this type of coverage for your business to meet their requirements. Even if you don’t do business with these companies, owning a cyber liability coverage shows that your prioritize cybersecurity and customer protection.
Should You Get Cyber Liability Insurance Coverage for Your Business?
Yes, you should consider getting cyber liability protection for your business today. “The number of cybersecurity breaches is on the rise and no business is immune to these breaches.” says Wasif Ibrahim of SwHaus, a digital solutions agency in Chicago.
Getting the right cyber liability insurance coverage for your business will show your customers that you care. Also, it will protect your business from paying out of your pocket all the hefty costs of an online security and data breach.
Before contacting your insurance broker, it’s important to assess your business risks and consult experts in the matter. After conducting the analysis, you should contact your insurance broker to learn what type of coverage is the right policy for your business. The right broker will take their time to understand your business needs and offer a wide range of options.
Want to get the right cyber liability coverage for your business? We can help. Fill out our form to receive your insurance quote today.