The Benefits of Cyber Insurance Coverage
Find out if your business might benefit from cyber insurance coverage.
Data breaches have become an all-too-common occurrence, with billions of records being exposed each month. For companies, the costs of cleaning up after a breach can be incredibly steep, costing many companies millions.
To protect against these financial risks, some organizations — particularly those in highly-targeted industries such as health care, finance, and insurance — may consider the benefits of cyber insurance.
Types of Cyber Insurance
There are two main types of cyber insurance that most firms may want to have: “first-party” and “third-party.” First-party insurance helps pay for the direct costs, such as investigating the breach’s cause; notifying and providing credit monitoring services to clients; and dealing with business interruption and any harm to the practice’s professional reputation. Third-party coverage pays costs suffered by others, such as lawsuits or regulatory fines stemming from the breach. Cyber insurance policies are customized to a company’s needs and risks, as are premiums and payouts.
Here are a few things to consider before purchasing a cyber policy:
- What are your cyber liability risks? Companies should understand the key risks stemming from their data storage. For example, some practices may keep clients’ trade secrets, customer lists, marketing plans and intellectual property documents.
- Do your employees work remotely? If a large portion of your workforce is still working remotely, the computer they use may not have the data-security protocols of their office computer. Be sure to discuss this with your insurance advisor, as some policies may not cover a cyber-attack on computers outside the office.
- Do outside vendors and consultants access your data? Some policies may not cover a cyber-attack targeted at an outside vendor, even if it compromises your data.
- Do you understand all the terms? The language and exclusions differ from policy to policy. For example, it’s important to know what terms like “confidential information” and “personally identifiable information” mean to your insurer.
It’s important to have an experienced guide to help you find a cyber policy that meets your needs. Consider working with a professional who can assess your practice’s risks and compare policies and terms across a broad range of insurers.
Create a Data Breach Response Plan
Finally, in addition to investing in cybersecurity and purchasing cyber insurance coverage, having a solid response plan in place can potentially help reduce the overall impact of a data breach. Should a data breach occur, the plan will serve as a roadmap, giving your team the ability to react with speed. Learn more about how to create a data breach response plan.
For more strategies and tips to help you safeguard your business, visit regions.com/fraudprevention.
