Protect Your Business with Top Cyber Security Insurance

Cyber insurance protects businesses from the financial impact of cyber threats like data breaches and attacks. In today's digital age, where technology is always advancing, businesses face increasing risks. Cyber insurance acts as a safety net, providing financial support in case of a cyber-attack.

Cyber risk insurance policies cover a range of costs associated with a cyber incident. These costs can include:
• Investigation expenses
• Legal fees
• Data recovery costs
• Notification costs to affected parties
• Business interruption losses and damages to a company’s reputation

Why is Cyber Insurance Important?

With cyber threats becoming more common, cyber insurance is crucial. It covers financial losses from data breaches and business interruptions and helps recover from cyber attacks. It also provides peace of mind for businesses, knowing they have a plan in place for potential cyber threats.

Who Needs Cyber Insurance?

In a data-driven world, businesses of all sizes are at risk of cyber attacks. Any company involved in online activities, from websites to credit card processing, needs cyber insurance. A single incident can pose serious risks to a business's reputation and financial well-being. According to the Identity Theft Resource Center (ITRC), nearly 73% of small businesses in the US faced a cyber-attack, mainly targeting employee and customer data in 2022.

If you deal with any of the following information, having cyber insurance is a must:
• Social Security numbers
• Customer credit card details
• Customer names, addresses, phone numbers, etc.
• Medical and Personal Health Information (PHI)

General liability policies that most businesses acquire typically do not protect against the loss of customer or employee information in the event of a data breach. While some insurance companies provide basic cyber liability coverage, it often comes with notable gaps in protection.
What Does Cyber Insurance Policy Cover?
Cyber insurance covers various costs related to a cyber incident, including investigation expenses, legal fees, data recovery, notification to affected parties, business interruption, and damage to a company's reputation.

First-Party Coverage Offered

Cyber liability insurance shields you from the financial fallout of a data breach. It may include coverage for:

Loss of Electronic Data: Repairing software or replacing lost data from a cyber attack is covered.
Business Interruption/Loss of Income: If a cyber incident stops your business operations, some policies can cover lost income and expenses.
Cyber Extortion: If a cyber criminal holds your data hostage for ransom, this insurance helps pay the ransom.
Security Fixes and Cyber Forensics: Costs for enhancing security and investigating the breach are covered.
Notification and Identity Protection: Expenses for notifying affected customers and providing identity protection are included.
Fraud and Credit Monitoring: Costs for credit monitoring of impacted customers are covered.
Business Reputation Impact: Expenses for managing public relations and repairing your business reputation are included.

Every cyber liability insurance provider outlines different coverages and exclusions, so consulting a specialist is crucial.

Third-Party Coverage Offered

Damages to a Third-Party System: Coverage for unintentional virus transmissions to other systems.

Network Security and Privacy Liability: Protects against alleged negligence in customer information protection.
Media Liability Claims: Covers accusations of libel, slander, or fraud.
Regulatory Proceedings and Fines: Addresses fines from regulatory bodies.
Legal Costs, Settlements, and Damage Awards: Up to the policy limits.

Carefully review the terms and conditions of a cyber insurance policy to understand coverage details, exclusions, and limitations. Some policies may exclude specific cyber attack types or impose coverage limits.

What's Not Covered?

Cyber insurance may not cover intentional acts, prior events, physical damage, contractual liabilities, or certain types of cyber attacks. Understanding these exclusions is essential for businesses to maximize their coverage.

Exclusions in Cyber Liability Insurance:

Intentional Acts: Damages resulting from a cyber attack carried out intentionally by an employee or authorized individual may not be covered.
Prior Acts: Some policies only cover damages occurring after policy purchase, excluding damages from prior events or known issues.
Physical Damage: Cyber insurance typically covers intangible losses like data loss but may not extend to physical damage to equipment or property caused by a cyber attack.
Contractual Liability: Coverage may be excluded for liabilities assumed under a contract or agreement.

How Much Does it Cost?

The cost of cyber insurance varies based on factors like business size, industry, and coverage needs. Small businesses might pay a few hundred dollars annually, while larger corporations may invest more. It's a small expense compared to the potential costs of a cyber-attack.

In 2021, cyber insurance cost around $1,589 per year or $132 per month in the U.S. Meanwhile, IBM reported that the average expense for a data breach soared to $4.35 million in 2022, showing a continuous increase in these costs.

As a business owner, it's crucial to recognize that the cost of cyber insurance is just one aspect to ponder when deciding to invest in a policy. The potential expenses linked to a cyber attack—such as business interruption, investigation, customer notifications, and legal defenses—can far exceed the price of the insurance itself. Businesses need to weigh these potential risks and costs. Let us assist you in safeguarding your business with cyber insurance. At Ajent, our mission is to efficiently connect you with the right insurance provider and policy.