You can (and should) take a whole host of cybersecurity precautions for your business. You should set up firewalls, encrypt emails, train users, and constantly update your security strategy.
But the most secure networks, the most educated users, the best laid plans: Even those can fail you. Hackers continuously adapt to new circumstances and try different tactics. No matter how careful you are, it is possible that your company will be a victim of cybercrime.
What if it still happens? That’s where cybersecurity insurance comes in. Cybersecurity insurance – sometimes called cyber liability – covers businesses when they are targeted by cybercrime.
What does cybersecurity insurance cover?
You manage risk by carrying insurance for the various other aspects of your business – such as general liability insurance, which would cover things like property damage. You should also consider managing the risk inherent in using technology by carrying cybersecurity insurance, which covers losses caused by digital incidents. Your other business insurance policies likely do not already cover those types of losses.
Most cybersecurity policies cover exposures that include privacy and data breaches, as well as digital crimes related to malware, such as ransomware. This type of insurance also usually covers the fallout following such incidents, which could include notification of customers that their data has been compromised or other crisis management activity.
All insurance policies have coverage exclusions. One common exclusion from most cybersecurity coverage is theft of intellectual property. Make sure that you read your policy to understand what is and is not covered and ask questions if something is not clear to you.
How does cybersecurity insurance work?
Like with other forms of insurance, your business pays a monthly (or annual) premium to the insurance company. Most policies carry a deductible. But not every cybersecurity insurance policy is created equally
– and not every policy covers the same hazards.
You might find that consulting with experts, such as those at Business Network Solutions (BNC), which provides Dallas managed IT services and Denver managed IT services, helps you determine which plan features you need. For example, your company may need coverage for reputational harm, which is not necessarily covered by all policies.
How much a policy costs depends on the number of risks inherent in your business practices. For example, having a robust network security system can cause a decrease in the premium for your cybersecurity policy.
Why should a company hold cybersecurity insurance?
Because nearly every business utilizes technology, and because the risks of a digital presence are undeniable, cybersecurity insurance acts as another tool in your arsenal to keep your business secure. Especially if your organization handles sensitive information, BNC recommends becoming a cybersecurity policyholder.
BNC consultants can address any questions you may have about what your business needs to have covered and how to strengthen your security practices in general. They can help you compare and contrast policies to figure out the best choice for you.