What You Need to Know About Cyber Risk Insurance
Online businesses rely so much on the internet for administrative work, marketing, managing the inventory, processing of credit cards, and distribution controls. Any disruption of these tasks can lead to damages including reputation and brand, dissatisfaction of stakeholder, financial losses, and regulatory scrutiny. Just one cyber event can destroy your business.
All online businesses of all sizes is at a tremendous risk for data breach or cyber attack. A study suggested that to rectify a breach has gone up to over $6 million. It takes just one good hacker, a stolen laptop, one lost paper record, or one virus can make a huge financial and reputation damages to your business.
It is no longer a question of your business suffering a breach, but when will your business be prepared for such eventuality?
Cyber risk coverage is a new product in the insurance industry. There are more or less 50 insurance carriers that offer this, but the amount of its coverage is limited. These policies has different names like, “cyber risk”, “ privacy”, “media liability”, “information security” coverage. This kind of coverage often gives room for deliberation of the terms of cyber policies compared to other kinds of coverage.
There are combination in most cyber policies. The traditional liability coverage protects businesses against third party claims, and first-party coverage, protects businesses against losses.
There are significant terms and conditions of this policy that can have a great impact on the available coverage. Businesses should be aware not to expect to secure every part of the coverage. You should know the differences among the policies that are being offered in the market as it is critical to maximize money spent.
To be able to compare the policies in the market, know the limits and special circumstances.
- Find out if the insurance policy company offers cyber insurance policies that are of one or more types. It could be that the coverage is just an extension of an existing policy. That being the case, a stand-alone policy is more comprehensive. Ask if the policy can be modified to your business.
- Compare the deductions of the insurers just like what you do in other policies.
- Does your cyber coverage and limits apply to first and third parties? Then find out if your service provider has cyber insurance. How will it affect your agreement?
- Will the policy cover attacks where the business falls as victim or only targeted attacks against a certain industry or business in particular?
- Will the policy cover non-malicious action of an employee? This is part of the E&O coverage (errors & omissions, a form of a liability insurance) that also applies to cyber insurance.
- Will the cyber insurance cover social engineering and network attacks?
- Does the policy comprise time frames within which the coverage applies?
The reality is: if you want your business to survive, get a cyber risk insurance or cyber liability insurance coverage. Always be careful in doing any transaction online. Make sure that work computers are strictly for business. Do not mix your work, and personal files. If one needs to play, browse, search, and so on, make sure it is on a personal computer. Do not wait for a cyber attack to happen. Prevention is better than cure.