Does Your Business Need Cybersecurity Insurance?
Cybersecurity insurance can help some businesses reduce the financial risks of conducting business online. The theft, compromise, or loss of data can have a significant negative impact on a business, including revenue and customer loss. This type of liability coverage can protect a business against the risk of cyber events, including ransom attacks. However, this insurance only reimburses clients for proven losses. This means that if you can’t show the insurance provider a bill for losses, you will not be reimbursed for damages.
Who Needs Cyber Liability Insurance?
A company that manages and stores electronic data online, including:
- PII and credit card numbers
- Customer sales
- Customer contacts
- Any type of company that stores customer information on its website will need cybersecurity coverage.
What Does Cyber Liability Insurance Cover?
Many Insurance companies now offer cyber liability policy options. Aside from legal fees, most policies will cover:
- The recovery of compromised data
- Notifying customers of the data breach
- Recovering data that was stolen or altered
- Replacing or repairing damaged computers systems
- Restoring the personal identities of affected customers
- Repairs for damaged computer system
- Hiring computer forensic experts
- Depending on the type and cost of the policy, you can expect to be covered for expenditures that result from the theft of information technology assets.
What are the Requirements for Cybersecurity Insurance?
To determine a company’s coverage limits and premium, or whether they qualify for insurance, as part of their underwriting process, many providers will carry out an insurance risk assessment. Depending on the size of the company, the process may involve a cybersecurity firm carrying out a detailed analysis that can take several weeks, or it can be as simple as filling out a questionnaire. Reassessments and regular checkups may also be required.
IT Security Standards
Policyholders are often required to meet basic IT security standards to qualify for cyber liability insurance coverage. A business interested in purchasing coverage must have the minimum safety measures in place:
- Company data must be backed up regularly using a secure cloud service or external media
- All computers must have up-to-date antivirus software
- The company’s network must be protected by a firewall
- User permissions and access rights must follow a secure provisioning process
Unfortunately, some companies see purchasing cyber liability coverage as a way to get around investing in their IT security. Because of this, insurance providers must enforce these basic security standards. Cybersecurity insurance should be an extension of a company’s existing IT security measures, not just a band-aid solution for poor IT security or lack thereof. Taking important steps to improve IT security can lower a company’s insurance premiums and prevent attacks.
Some insurance providers will also expect a company to use multi-factor authentication/2-factor authentication. A business may be asked to provide results from its last security risk assessment, which inventories the company’s security controls and network setup to identify vulnerabilities.
They may also need to provide the insurance company with a copy of its backup and disaster recovery plan since a tested and current backup plan can save a company hundreds of thousands of dollars in ransom.
Does Your Company Have a Cybersecurity Plan?
These areas include:
To stay updated with the latest defense tactics, you need certain expertise. The cyber threat landscape continues to evolve, which can make it difficult for your in-house IT team to stay on top of these constant changes, especially if your team is understaffed. By working with TechBldrs, you will always have the latest protection because our cybersecurity specialists stay current with industry standards of defense.
Our cybersecurity services will be tailored to protect your network environment’s unique conditions.
We can assess your data backup and recovery system, what safeguards you currently have in place, whether your employees have had cybersecurity training and at what level, and we will also identify risks, and work with you to create a cybersecurity plan that will include safeguards we will implement, based on the unique needs of your company.
Contact TechBldrs Today to Schedule a Consultation
Cybersecurity insurance is still fairly new, and some smaller businesses may not need it, especially if you keep your important client info, company data, and other sensitive data, stored in the cloud. However, some companies may benefit from this type of coverage. But IT security should remain your top priority. Remember, if you want to even qualify for cybersecurity insurance, you need strong IT security protection and certain safeguards in place. If you’re not sure if cybersecurity and liability insurance is right for you, or if you want to learn more about the IT security services we offer, contact TechBldrs today to schedule a consultation to learn how we can help.
If you enjoyed this article, check out these other articles about Cybersecurity:
It’s time to “get smart” about your cybersecurity in the Greater Philadelphia Area
Understanding the Risks: The Rising Threat of Cyber Attacks
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