For businesses of all industries and sizes, preventing cyberattacks and maintaining a strong security posture are top priorities. In recent years, cybercriminals have upped their game, striking companies with advanced cyberattacks that result in the theft of personally identifiable information and financial losses. Despite the best cybersecurity efforts, many organizations fall victim to these malicious attacks. What can businesses do to reduce losses and handle these situations effectively? Cyber insurance provides coverage in the event of cyberattacks to mitigate losses.
Cyber attacks result in significant financial losses, whether from cybercriminals demanding a ransom or from money spent or lost in the event of outages. In fact, the FBI’s 2023 Annual Crime Report reported cybercrime-related financial losses to total around $12.5 billion. These substantial numbers speak to the importance of a plan for cybersecurity measures, including cyber insurance to reduce the financial burden. Just like other forms of insurance that cover physical damages, cyber insurance accounts for risks in the cybersphere.
What should your business know before investing in cyber insurance? And what benefits make cyber insurance worth the investment? Learn about the details of cyber insurance in this article.
Types of Cyber Insurance
Before purchasing a cyber insurance plan, understanding the types of available insurance is important. By assessing these options, you can gain a stronger grasp on the coverage your business needs.
- First-Party Cyber Coverage: First-party cyber insurance protects your organization’s data and covers the costs involved with recovering and replacing lost data. This coverage also offers insurance for the costs related to things like legal counsel, public relations, fees and fines, and more following a cyber event.
- Third-Party Cyber Coverage: Third-party cyber insurance provides financial indemnity for a business if a claim as a result of a cyber event is brought against it. This will cover payments to consumers, settlements, and losses related to trademarks or copyrights, among other related items.
- Technology Errors & Omissions (Tech E&O) Insurance: Errors and omissions insurance covers mistakes leading to client losses during a cyber event. This involves claims such as service errors that prevent a business from fulfilling contractual obligations.
- Privacy Liability Coverage: Privacy liability coverage protects an organization’s personally identifiable information (PII). If a data breach results in the loss of employee or customer information, privacy liability insurance protects a company from liabilities.
Why Invest in Cyber Insurance?
What makes cyber insurance a worthwhile investment for businesses of all sizes across industries? Protecting your data is more important now than ever, with the risks of cyber attacks on the rise. Learn about the benefits of investing in coverage for your data in greater detail below.
Mitigates Risks of Cyber Attacks
Cyber attacks come with various risks to your company’s data and finances. Without any coverage, even companies with the most robust cybersecurity measures in place run the risk of falling victim to cybercrime and losing copious amounts of data and money. Because your chances of being the victim of a cyber attack are never zero, insurance coverage offers the protection you need to bounce back from a data breach or ransomware attack with reduced damages overall. Just like insurance on a home or business would help to recover following a natural disaster, cyber insurance allows businesses to get back on their feet in the event of these malicious cyber attacks.
Provides Financial Coverage
Even the most cyber savvy companies can be targeted by cybercriminals and lose huge sums of money. In fact, 60% of small and medium-sized businesses shut down within 6 months following a cyber attack, largely due to the costs involved with paying ransoms and remedying issues following the attack. However, having a cyber insurance policy allows businesses to recoup the costs lost from these attacks, minimizing financial losses and empowering companies to get back on their feet quickly and more effectively.
Remediates Security Events
Handling the aftermath of a cyber attack can be incredibly difficult for companies of all types. On top of the financial damages, these businesses then need to deal with the lost data, downtime, and security vulnerabilities now impacting their organization. Although bouncing back from these attacks can be incredibly difficult, cyber insurance allows businesses to remediate these security incidents at a much faster rate and minimize the lingering difficulties often felt in the aftermath of a breach.
Strengthens Customer Trust
When personal data is compromised in a cyber attack, the company isn’t the only party affected—customers and clientele are largely affected too. Many customers feel distrusting of a company following a cyber attack, as they may think that the organization was not taking the proper measures to safeguard their data. Customer trust can be challenging to regain in these situations, but with a cyber insurance policy, customers can feel more confident in a company’s abilities to bounce back from these attacks. Plus, in the event of customers needing refunds or other financial reimbursement, cyber insurance can make this step much more feasible for a company.
Meets Regulatory Compliance
Depending on the industry a business is in, higher standards may need to be met. This is particularly true for government and healthcare. To meet these standards, organizations need recovery plans in place, and having a cyber insurance policy can be an important part of these plans to manage risk effectively.
Protect Your Business with Cyber Insurance
No matter the size of your business or the industry you work in, cyber insurance offers significant value and protection in the event of a cyber attack.
Looking for help improving your organization’s security poster? Trust GoodSuite, California’s premier provider of critical business systems. Our managed cybersecurity services handle everything from protecting company data to meeting compliance requirements and much more, so you can focus on other business needs while we keep your data safe.
GoodSuite also works with Galactic Advisors, a third-party security tool that helps businesses pinpoint the right cybersecurity plan for their needs. Our team uses this tool to map out your cybersecurity needs and find your ideal policy through Galactic.
By partnering with GoodSuite, your business can remain cybersecure and obtain valuable cyber insurance—thoroughly preparing you for any cyber incidents. Request a free assessment online or call us today to learn more about our services.
