There are no coincidences in the digital world. There are very real, very scary implications behind every hack, breach, virus, or worm. And as technology becomes more and more advanced, the stakes for businesses grow higher and higher. Without proper cyber security insurance, these risks can have lasting effects on your business. Unfortunate as it may be, cyber attacks are becoming all too common and the costs of responding to them can be astronomical. If you own a business that maintains sensitive information online or stores data digitally, you need to read on to learn why cyber security insurance is essential for any company whose services could be compromised by hackers.
What Is Cyber Security Insurance?
Cybersecurity insurance is a type of commercial insurance policy designed to protect against cyber attacks that cause damage or loss to a company’s computer systems or data. This coverage is often included as part of a business’s general liability policy, but if it’s not, it’s recommended that companies obtain a standalone cyber security insurance policy. Cybersecurity insurance is used to reimburse companies for the cost of defending against cyber attacks, dealing with the aftermath of an attack, replacing stolen or damaged data, and paying for fines and penalties imposed by regulatory agencies.
Why Is Cyber Security Insurance Important?
In 2017, the global cost of cyber crime reached an estimated $450 billion. That’s a staggering amount of money, and it’s not likely to decrease in the future. The key word here is “crime,” and that’s because cyber attacks are, for the most part, malicious, criminal acts. These cyber criminals steal your sensitive information, hold it for ransom, or cause damage to your company’s computer systems. That can lead to financial loss, reputational damage, or even injury. For example, consider the WannaCry virus that infected millions of computers in 2017. This virus locked computers and requested a ransom payment, but most victims were not able to pay the ransom. In the end, they had to pay a different price: the cost of restoring their computers from backups.
Why Is Cybersurance So Important Right Now?
Cybersecurity insurance has become extremely important over the last few years due to consistent data breaches at major companies and an increased regulatory environment. First: major data breaches. There have been so many data breaches in the last few years, it’s hard to keep track of them all. From the Marriott data breach to the Facebook/Cambridge Analytica breach, there have been dozens of high-profile data breaches that could have easily been avoided with better cybersecurity. And those data breaches have cost companies millions in fines, penalties, data restoration, and legal fees. Second: regulatory environment. In the last few years, governments have taken notice of the cybersecurity gaps in companies’ systems. As a result, they’ve enacted new laws and increased the penalties for security breaches. Those include the California Consumer Privacy Act and GDPR.
Are There Different Types of Cybersecurity Insurance?
Yes. In addition to general cyber insurance, there are also specialized policies for specific types of cyber attacks. For example, you can purchase insurance to cover ransomware attacks, denial-of-service attacks, data breaches, and more. Other types of policies can cover malicious code, malicious hacking, and malicious network attacks.
How Much Does Cybersecurity Insurance Cost?
The cost of cyber insurance varies depending on the size of the company, the amount of coverage, and the type of policy. General cyber insurance policies typically cost between $1,000 and $5,000+, while specialized policies may cost several thousand dollars.
Summing It All Up
Cybersecurity threats exist in many forms, including ransomware, malicious code, denial-of-service attacks, and data breaches. Cybersecurity insurance can help companies deal with the financial fallout of cyber attacks, including fines and penalties. Cybersecurity insurance can vary in cost based on the size of the company, amount of coverage, and type of policy. Cyber insurance is available from a variety of insurance companies. Our insurance agency can help you find the perfect cybersecurity insurance policy for your business call us at (248) 362-1313 or fill in the form below. At E&Y AGENCY, LLC we work with many insurance carriers so we can shop around and find you the best rate!
