Since you started using a computer, you’ve been encouraged to backup your work. You may have even found out the hard way after losing an important document or file. Well, cybersecurity insurance is a way to backup your business.
If your company is hit with an online attack, the damage to your reputation, loss of assets, and legal liability could put you out of business. Investing in cybersecurity insurance is a wise precaution for a business of any size (especially if you store sensitive data) to guard itself against the high cost of an attack.
In this article, you will learn what cybersecurity insurance entails, why it’s important, and why you should consider buying a policy.
What Is Cybersecurity Insurance?
Cybersecurity insurance is a product that individuals and businesses can purchase to protect themselves in the aftermath of a cyber-attack.
Types of Cybersecurity Insurance
Most providers offer two types of cybersecurity insurance policies.
- First-party cybersecurity insurance handles costs associated with becoming a victim of an attack. This policy can cover everything from notifying clients of a breach to dealing with the repercussions of lost revenue.
- Third-party cybersecurity insurance addresses the risks involved when your business is blamed for a breach. This is especially helpful when a gap in your security allows a virus to be passed on to someone else. The possibility of being sued for inadvertently transmitting something to another business can be a big concern.
Why Is Cybersecurity Insurance Important?
Your regular policy probably does not include cybersecurity insurance. General liability insurance tends to cover bodily injuries and property damage resulting from your products, services, or operations—not intangible assets like data and reputational harm.
Cybersecurity insurance protects your company (and customers and vendors) against cybercrime and data breaches. This reduces your risk, whether from the impact of a business disruption or to cover your business’s liability in the event of a data breach.
What Else Should I Know about Cybersecurity Insurance?
Just like cybersecurity itself is ongoing and evolving, the insurance to protect it is also ever-changing. You can’t buy a policy and then forget about it. Vigilance and perseverance are imperative. While insurance can reduce some of the costs of a breach, only tight security and best practices will prevent attacks in the first place.
Why Do I Need Cybersecurity Insurance?
Now you know all about cybersecurity insurance, the benefits of having a policy, and how much value this protection can bring to your business.
The purpose of cybersecurity insurance is to mitigate losses from a data breach, network damage, or other cyber-attack that takes down systems and causes loss of revenue.
As cyber-attacks grow in number and sophistication, it makes sense to be proactive and seek all the protection you can get. While cybersecurity guards you against an attack, it’s not completely foolproof. You need cybersecurity insurance to back you up in case your first line of defense fails.