A look into what cyber liability insurance is and why businesses need to get ahold of it.
Health insurance, car insurance, and life insurance are a part of everyday life and are meant to protect us, at least financially, when unfortunate things happen in our lives. While insurance can help alleviate some financial burdens in our personal lives, typical general liability insurance doesn’t cover cyber events such as data breaches, ransomware, business email compromise, etc. – making cyber insurance a business necessity.
The data breach horror stories you hear the moment you join the MSP business is terrifying and unsettling. Being told that your accounting files have just been breached or that your company has been infected with ransomware is enough to leave the most stone-cold C-suite employees shivering in their beds at night. All companies need to have a contingency plan that includes cyber insurance for worst-case situations. The sad truth is that most senior-level employees at small businesses don’t take posts like this one very seriously (and I have the data to back that up). According to Keeper Security’s 2019 Cyberthreat Study, 66% of senior decision-makers at small businesses believe they are unlikely to be targeted by criminals. It’s time to wake up and smell the coffee! Summit Technology is here to teach you the basics of cyber insurance.
What does Cyber insurance cover?
It’s important to understand what type of cyber insurance plan you are signing up for because different policies cover different “damages”. There are two main types of cyber insurance: Data Breach Insurance and Cyber Liability Insurance. Sometimes insurance companies will cover a combination of the two… but often they are sold separately.
Cyber liability insurance
Cyber liability insurance was created to give coverage to companies that deal with PHI or PII (protected health information or personal identifiable information). Typically, cyber liability insurance is aimed at companies that store data concerning medical information, credit cards, social securities, customers’ personal information, and bank account information. Cyber liability insurance usually covers both first-party and third-party coverages. This will include things such as:
First-Party:
- Cyber Extortion Payments
- Customer Credit/Fraud Monitoring
- Public Relations
- Investigation Costs
- Business Interruption Expenses
Third-Party:
- Legal Costs
- Settlements and Judgments
- Court Costs and Fees
Data breach insurance
This type of insurance was designed to reach a wider audience in that it covers any type of business that has had a related data breach, file theft, and/or hack. This insurance will also cover both accidental data breaches and hacker breaches. Data breach insurance is designed for only first-party coverage and will help with the following type of incidents
- Ransomware
- Malware Attacks
- Insider Data Breach
- Employee Data Theft
- Accidental Employee Data Loss
We live in an age where having some form of cyber insurance is necessary. Having your head buried in the sand is no longer going to cut it moving forward. You must be proactive!!! Making decisions around cyber insurance can feel daunting and foreign.
Where to buy it?
Cyber insurance policies can be kind of complicated if you aren’t already familiar with them so it is best to purchase them from an expert. You can either purchase cyber insurance as an add-on with your insurance company or as a service from a Managed Service Provider. For example, Summit Technology offers cyber insurance as a part of our Managed Services product, Agility 365. This product suite, along with other features, includes cyber insurance coverage from $250k up to $1 million for your business. Both are good options but with an MSP, you would get more than just cyber insurance, you would get all other types of security measures that they see fit.
Talk to us about how we can find you a solution that is Simple. Convenient. Secure.
If you still have questions about cyber insurance, you can contact us at learnmore@greatservice.com or fill out our contact us form.
