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Best Cyber Insurance for Your Business • Benzinga

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Cybercrime costs are expected to reach $10.5 trillion by 2025, according to Cybersecurity Ventures. Cybercrime is especially devastating for small- and medium-sized businesses, which may not have the resources to recover. 

Cyber insurance is 1 aspect of a cybersecurity plan. Learn more about cyber insurance and how it works. 

What is Cyber Insurance?

Cyber insurance helps your business with the costs of recovering from a cyberattack. 

Businesses of all sizes are frequent targets for cybercriminals because businesses have valuable data, including their customers’ personal data and payment information. 

Cyber Insurance Coverage

Cyber insurance covers a range of losses related to a cybersecurity breach. The exact coverage varies by policy, but in general, it includes:

  • The costs of notifying customers of a security breach
  • Identity theft protection and credit monitoring for affected customers
  • The costs of recovering data
  • The costs of repairing damaged hardware and software
  • The cost of hiring a public relations firm to help your business deal with the fallout

It also helps to cover the cost of lawsuits from customers who have had their personal data compromised. 

Types of Cyber Insurance

Cyber insurance policies vary by company, so it’s critical to review the coverage carefully and choose a policy that fits your business’ needs. Policies typically include the following types of coverage:

  • Network security: This covers costs that your business pays for directly due to a cyberattack, including legal expenses, IT forensics, payment of a ransomware demand, data restorations and credit monitoring and identity restoration for customers. 
  • Privacy liability: This covers legal costs related to a cyberattack, including defending your business from lawsuits related to the security breach and legal expenses and fines related to regulatory investigations. Businesses working in heavily regulated industries like finance and healthcare should keep these regulatory costs in mind. 
  • Network business interruption: This coverage helps you if your business has to close temporarily due to a cyberattack or a system failure. It can help with lost profits and other expenses while your business is closed. 
  • Media liability: This protects you from claims related to intellectual property infringement and covers both online and print advertising. 
  • Errors and omissions: This protects you if you’re unable to meet business obligations due to a cyberattack. For example, if an accounting firm experienced a cyberattack, it might not meet tax deadlines, causing their clients to incur penalties and fees. This coverage helps pay claims related to performance errors or being unable to perform services. 

While these types of coverage are found in most policies, insurance companies also offer add-ons worth considering, including:

  • Social engineering coverage: In this type of attack, criminals con employees into revealing compromised information. For example, a criminal might pose as an IT support person and be given access to servers, making it easy to hack into your network. It may be included as part of a crime policy or as part of a cyber insurance policy, so talk to your agent about how to ensure these types of attacks are covered. 
  • Reputational or brand damage coverage: This type of coverage helps your business recover from the fallout that comes with a data breach. It reimburses you for the losses that come from negative publicity. 
  • Bricking coverage: This is coverage for hardware that is no longer useable due to a cyber attack. 

Advantages of Cyber Insurance

The main advantage of cyber insurance is peace of mind. It ensures that if your business experiences a cyberattack, you’ll have resources to help you recover. It also ensures that you can assist impacted customers, which is a big step in earning back their trust. 

It encourages your business to have cybersecurity measures in place. One of the factors insurance companies use to determine your rates is the security measures you have in place. Better security measures could result in a lower insurance rate. 

Disadvantages of Cyber Insurance

One disadvantage of cyber insurance is that it isn’t standardized. Each insurance company offers different coverage. It’s important to dig into the details when you shop for cyber insurance to ensure everything you want is included in the policy, either in the base policy or as an endorsement (a policy add-on). 

Another disadvantage is, potentially, a false sense of security. It could be tempting to rely on your cyber insurance as a cybersecurity tool when it’s really a back-up in case your security measures aren’t enough. 

Some also feel that cyber insurance has emboldened cybercriminals, especially those who commit ransomware attacks. Ransomware is when your system is locked by cybercriminals, and it can only be unlocked with a code. 

The hackers demand a ransom in return for the code. Since cyber insurance typically covers these ransom demands, some feel that insurance has encouraged criminals to commit more of these attacks. 

Cyber Insurance vs. Cybersecurity

Cyber insurance, as discussed above, is not the same as cybersecurity. Cyber insurance is a back-up if cybersecurity measures fail. 

It’s part of a comprehensive approach to cybersecurity, which should include: 

  • Firewalls 
  • Antivirus and anti-malware software 
  • Regular software patching
  • Strong passwords
  • Multi-factor authentication
  • Device encryption
  • Staff education
  • Data backups

This is not an exhaustive list of the measures businesses should take for cybersecurity. The Better Business Bureau offers a guide to help you get started or improve your current security stance. 

What is Not Covered with Cyber Insurance?

Like any insurance policy, some situations aren’t covered. These include:

  • Claims covered by other policies like general or professional liability
  • Electrical or mechanical failures
  • Deliberately dishonest acts
  • Fraud
  • Wear and tear of your equipment
  • Acts of war, which could include breaches by a foreign power
  • Theft of intellectual property (covered in an intellectual property policy)
  • Costs associated with improving your security and technology after a breach 

Best Cyber Insurance Companies

Which cyber insurance companies are the best? Here are Benzinga’s recommendations. 

1 Minute Review

The Hartford is a leader in casualty and property insurance. It brings more than 200 years of experience in developing and providing insurance products. The company uses a quote-based pricing scheme to offer insurance in 2 main segments: commercial and personal lines. 

Its commercial segment serves over 1 million small businesses. The personal segment offers only nationally-endorsed home and auto insurance through the AARP® Insurance Program. The Hartford sells its products mainly through a network of independent brokers and agents. 

The company is also a 12-time honoree for the world’s most ethical companies according to The Ethisphere Institute. It delivers the name recognition and reputation of an experienced insurance carrier.

Best For
  • Those looking for an experienced insurance provider
  • Multiple coverage options with 1 carrier
Pros
  • More than 200 years of insurance experience
  • Provides online quotes
  • Has a solid financial rating
  • Offers a wide range of commercial insurance products
Cons
  • Pricing is entirely quote-based

1 Minute Review

Hiscox, a business insurance company headquartered in Chicago, specializes in policies for small businesses. You’ll find general liability, professional liability and property insurance offered through brokers and online.

Best For
  • Small businesses
  • Businesses hiring their first employee
  • Businesses with part-time or full-time employees
Pros
  • Specializes in small businesses
  • Offers a discount for bundling policies
  • No added fees for monthly payment option
Cons
  • Not the best option for larger businesses

Is Cyber Insurance Right for You?

Most businesses would benefit from cyber insurance. Take the time to get multiple quotes and tailor your coverage to the risks your business faces. It’s an essential part of a comprehensive cybersecurity plan. 

Frequently Asked Questions

Q. Is cyber insurance worth the cost?

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Q. Is cyber insurance worth the cost?

asked

Melinda Sineriz

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Many business owners find that cyber insurance is worth the cost because it covers situations that aren’t covered by other types of business insurance. 

Some refer to this as silent cyber, which means that most insurance policies are silent about cyber attacks. This means that coverage is typically limited unless you have a policy that specifically covers it.

answered

Benzinga

Q. Who needs cyber insurance?

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Q. Who needs cyber insurance?

asked

Melinda Sineriz

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Businesses that handle customer data or payment information should consider having cyber insurance. In other words, most businesses. 

answered

Benzinga

Q. Do individuals need cyber insurance?

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Q. Do individuals need cyber insurance?

asked

Melinda Sineriz

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Individuals typically only need cyber insurance if they run a business. Otherwise, individuals should consider identity theft insurance, which provides coverage if your data is compromised. 

It typically includes identity and credit monitoring, identity recovery assistance and reimbursement for out-of-pocket costs associated with identity theft, including postage and notary costs and possibly lost wages and legal fees. 

It doesn’t reimburse you for stolen funds, but banks and credit card companies may be able to assist in those instances. 

answered

Benzinga

Simply Insurance makes buying business insurance easy for everyone. You can quickly, easily and affordably get insurance for your business – whatever the niche may be. Simply Insurance requires low down payments and flexible payment plans to fit each person’s individual budget. Its friendly staff puts customer service as its No. 1 priority to ensure you get the best experience.



Source: on 2021-03-25 12:18:45

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