Most store companies send or receive electronic data containing details of the business, sales projections, customer and employee’s information, or tax records. However, data breaches and cyber-crimes can disrupt the smooth flow of data collation and also lead to major fines and legal fees for the affected companies.
As damages are paid to third parties whose information may have been stolen during a cyber-attack on your company, both large and small businesses are greatly affected by this.
One precautionary measure that can be taken is to get a cyber liability insurance plan. This is a product that guards your establishment’s liability and individuals from the risks associated with internet data rift. It protects sensitive information of customers like social security numbers, account numbers, driver’s license numbers, and credit card numbers.
This smart plan is able to manage risks effectively and safeguard your business from possible attacks. Businesses that are dependent on IT infrastructure are advised to get the cyber liability insurance policy to avoid exposure to risks and possible system failure caused by cybercrimes.
How to Choose the Right Policy
Knowing the right solution is important for your business because not every plan may be well suited for it. Every policy varies based on the operations, industry, or company size. Therefore, speak to an advisor to get one that’s properly suited for your establishment. There are some factors to bear in mind when choosing.
Assess Cyber Risks
The first step in determining the scope of coverage you may require is to understand your company’s risk exposure. Here are some questions to ponder:
What kinds of information do I save – e.g., sales statistics, personally identifiable data, credit card information, and customer information?
- Are all of these forms of information equally sensitive and in need of protection?
- What are the regulations I need to follow?
- What is the possibility of an attack?
Additionally, if you need other tips on how to protect your business from cyber-attacks, you can check here: https://www.nist.gov/blogs/manufacturing-innovation-blog/how-protect-your-business-cyber-attacks
Weigh Risks Against Cost of Premium
The premium on cyber insurance will be determined by your current security posture. Usually, strong security measures can typically assist in reducing premium rates.
Understand your entire insurance coverage and how well it covers the various cyber hazards that your company faces on a daily basis. For example, if your total coverage is $25 million, phishing-related financial losses may be limited to 20% of the limit, or $5 million.
Compare Available Options
Different cyber insurance companies have different policy definitions, coverage alternatives, and terms & conditions. What constitutes a security event, for example, differs from one provider to the next. The types of security events covered by each provider may also be different.
To assist you in comparing different providers, here are some questions to ask the insurance providers:
- Is the policy going to cover the costs of a business disruption caused by a cyber-attack on a client’s firm?
- When will the policy commence?
- Which risks are covered and which ones aren’t?
- What types of data are covered? Is there any particular type of data breach that isn’t covered?
- Is the policy going to cover costs incurred as a result of human mistakes, identity theft, and so on?
Read customer reviews of cyber insurance providers to get a feel of how they’re rated. Look at the brochures and websites of service providers to see the kind of services they offer. The following are some things to consider:
- Do they work with clientele in the same field as you?
- Do they work with businesses of the same size as yours?
Finally, seek help from colleagues in your field to determine which cyber insurance companies are reliable and offer the best policy.
If you can’t settle on a cyber insurance policy or provider, you can contact external finance and other IT professionals. Doing this will assist you in determining the overall coverage and premium levels that are appropriate for your company’s size and kind.
Key Benefits of Cyber Liability Insurance
Online criminal activities are becoming more popular and with the involvement of technology in the daily running of businesses, it is vital to have a cover plan that protects one from the dangers that accompany it. This policy also has some benefits and some of them include:
Business Interruption Loss Refund
A hack can cause disruption in the smooth operation of an enterprise. Lost time means loss of money which was unplanned for. A cyber indemnity not only protects your company from losing money but in the event of an attack boosts costs to operations.
Some insurance companies also offer cyber-attack preventive solutions to clients as part of their services. While this may come with a cost sometimes, it goes a long way in preventing the disruptions that trail an attack.
A cyber-attack is bound to incur some legal involvement and this can be provided by the insurance policy in the form of counsel or advice after the occurrence or even proper legal aid.
Data Breach Coverage
A company affected by an online attack may be required to pay extra costs such as protection from legal action, security repairs or upgrade, and identity theft. These are often covered by the policy including informing concerned parties of the data breach.
Most businesses avoid cases of a data breach as it discourages clients and customers from working with their brand. This explains why there is an increasing number of companies with this cover.
Investigations are often carried out after a breach to ascertain the cause of the attack so as to avoid a reoccurrence. A cover plan that makes provision for refund of expenses relating to the investigation, or additional support from professionals can be obtained.
Defense Against Cyber Extortion and Impersonation
Oftentimes, a business’s data may be held ransom until a fee is paid. With attacks such as this gaining ground, cyber liability coverage offers a way to recover losses from such an act. Additionally, some hackers perform phishing operations that are targeted at major companies. Once they succeed, they turn it into a business venture where they perform financial transactions on behalf of the company.
A good insurance company helps build a shield to protect you from business email compromise and other related internet crimes against enterprises.
Coverage Beyond General Insurance
General liability insurance does not necessarily cover losses resulting from data breaches. Furthermore, data is worth significantly more than other physical assets, so having the correct protection in place when you need it is critical.
Steps to Avoid Insurance Scams
The following are some steps to avoid insurance scams:
Research the Company
Do not engage the services of any insurance company without making proper findings on their activities. Some companies that make extremely attractive offers may be hiding something. It can also be an indication that you are dealing with the wrong company.
Check Licensing and Registration
Do not work with an unlicensed insurance company. Before you sign any agreement, request for their liability insurance and verify that the policy is still active. Doing this will prevent entering into an agreement with a scam or unlicensed company.
Verifying a business license can be a bit difficult especially when you do not have a guide handy. However, if you need assistance with verifying a business license, you can read this article.
Do Not Pay Cash
Ensure that you do not pay cash for the transaction. Pay by cheque or with a credit card. This way, there will be evidence of payment in case you want to make legal claims.
Cybercrime is one of the fastest-growing organized criminal acts around the world therefore purchasing a Cyber Insurance policy is vital especially for establishments that handle sensitive data or roles like banking information, process card details, and depend on IT systems.