From data breaches to service interruptions, cybersecurity insurance can provide a lot of protection for businesses of all sizes. — Getty Images/ljubaphoto
A growing number of cyber threats around the world are putting small and medium-sized businesses (SMBs) at risk. From ransomware to payment diversion fraud and malware, cyberattacks can be detrimental to small and medium-sized businesses with limited resources.
“According to the Hiscox Cyber Readiness Report 2023, nearly half (41%) of small and medium-sized businesses experienced a cyberattack in the past year,” said Mike Maletzky, Vice President and Product Director of Cyber and Technology at Hiscox USA. says Mr. “The most common type of attack is phishing, but hackers also get in through unpatched software or stolen credentials.”
Proper training and precautions can reduce the risk of a cyber attack, but there is no guarantee that you will not become a victim. Purchasing cybersecurity insurance is the best way to protect your company from financial and operational ruin following a cyber breach.
What is cybersecurity insurance?
Cybersecurity insurance, or cyber liability insurance, covers costs and losses related to cyber threats. These threats include the potential for cyber extortion and crime, breaches and business interruption. It also covers costs associated with data recovery, such as restoring, repairing, or replacing damaged data or software.
Most cybersecurity insurance providers offer first-party and third-party coverage. First-party coverage protects your business from cyber-attacks by covering lost data recovery and business interruption costs. It also helps cover the costs of recovery and forensic investigations to determine the cause of the attack.
Third-party indemnification protects your business if an external party is responsible for an attack. Compensates for legal costs and damages incurred by people outside the company due to attacks.
Cyber security and cyber insurance
Cybersecurity insurance is a big step in protecting your business from the effects of cyber threats. However, this coverage does not protect against attack. Instead, it helps businesses manage the legal and financial fallout of an attack and cover the associated costs and liability.
Cybersecurity, on the other hand, focuses on preventive measures. Strategies like two-factor authentication and encryption can help protect your business from malicious attacks in the first place.
What Cybersecurity Insurance Covers (and What It Doesn’t)
When considering cybersecurity insurance options, it’s important to understand exactly how it protects your business and what the coverage doesn’t include.
A policy from a cybersecurity insurance provider like Hiscox can cover the following as part of your basic policy or as additional coverage:
Data breach. Insurance covers costs incurred for breach identification and notification, payment for credit protection and crisis management services, cyber extortion, and more. Insurance protects businesses from cybercriminals’ ransom demands and costs associated with service interruptions. Cyber failures that impact network-dependent systems and result in lost revenue are covered, keeping your business profitable. Acquisition of data. This covers the cost of recovering, restoring, or replacing data or software lost as a result of a cyber-attack. Information security. If your business is accused of mishandling certain personal or confidential information, insurance may cover claims for legal defense and settlement costs. cyber crime. This covers financial losses due to cyber fraud such as fund transfers and social engineering. Digital media. Insurance may cover legal claims such as defamation and copyright infringement for content you share online.
Cybersecurity insurance typically does not cover:
Criminal procedure. This includes criminal prosecution claims such as grand jury proceedings and criminal investigations. Transfer of funds. There is no coverage for loss, theft or transfer of funds other than those included above. Infrastructure affected. Claims related to infrastructure interruptions or failures, such as power outages, are not covered. Intentional cheating. Intentional acts of fraud or dishonesty by a company or its employees are not covered. prior knowledge. If you already knew about the threat before purchasing the policy, your claim will not be covered.
“Cybersecurity insurance may seem complicated, but business owners don’t have to be experts in it,” Maletzky says. “To find what you need, go to a company like Hiscox, where we are experts in business insurance. Or go to an agent or broker who has commercial insurance experience.”
According to the Hiscox Cyber Readiness Report 2023, nearly half (41%) of small and medium-sized businesses experienced a cyberattack in the past year. The most common type of attack is phishing, but hackers have also made inroads through unpatched software and stolen credentials.
Mike Maletsky, Vice President of Cyber and Technology and Head of Product, Hiscox USA
Do you need cybersecurity insurance? 4 questions to ask yourself
Before purchasing cybersecurity insurance, ask yourself the following questions to determine your need for coverage:
1. Is my business partially or fully online?
If you conduct business online, an attack can completely shut down your operations and put your company’s sensitive data at risk.
2. Does my business accept all forms of digital payments, including credit cards?
When your business accepts payments or captures sensitive data such as credit card information, it’s your responsibility to protect everyone involved.
3. Will my employees and I access business data through computers or mobile devices?
The more points of access a business has to its data, the greater the risk of fraud. Consider how you and your employees access sensitive information and evaluate the security of each entry point.
4. Do you collect or store sensitive customer information, such as financial or medical data?
If a company collects and stores sensitive information that could be of benefit to malicious parties, it can become a target for cyberthreats.
If you answer yes to any of these questions, your business should immediately consider cybersecurity insurance coverage.
“Cybercriminals are getting bolder all the time, and AI is helping them become more efficient,” Maletzky said. “It’s important to protect data, which can be your company’s biggest asset, from those who might try to use it for malicious purposes. If you use computers for business, your cybersecurity insurance coverage may help. Please consider.
Why choose Hiscox for your cybersecurity insurance needs?
If you have insufficient cybersecurity insurance coverage (or no coverage at all), your business could be in trouble if a cyber incident occurs. Therefore, you should choose a provider that offers sufficient coverage to suit your company’s needs.
Hiscox coverage provides the following benefits to protect your business:
Individual policies. Hiscox customizes your cybersecurity policy to fit your business needs and provides customized coverage options to protect your business in all appropriate areas in the event of a cyber threat. Affordable pricing. Hiscox Cybersecurity Insurance starts at just $30 per month, or about $1 per day. Bundle discount. With Hiscox, you can save up to 5% when you bundle cybersecurity insurance with another business insurance policy.
But the best reason to get coverage through Hiscox is our suite of prevention tools, resources, and free classes to help protect your business before a cyberattack occurs. These precautions, combined with a team of data breach experts to assist you in the event of an attack, ensure you have the right support and expertise to protect your data from increasingly sophisticated malicious attackers. provided.
“You’re a business professional, but we’re business insurance professionals, including cybersecurity insurance, and we want to protect the business you’ve worked so hard to build,” Maletzky said. “You can also get a quote online to find out what you need and how much it will cost. You can also call us and speak to a qualified advisor who will answer your questions and help you stay protected. You can be sure of that.”
Get a cybersecurity insurance quote from Hiscox today
Don’t delay protecting your business. Take proactive cybersecurity measures before it’s too late. Contact Hiscox for a free quote on cybersecurity insurance tailored to your business to help protect your business from the effects of cyberattacks.
Subscribe to the newsletter “Midnight Oil”
Published October 30, 2024
