All the research you can find online points to the same simple fact: cybercrime is on the rise. This puts a premium on cybersecurity (no pun intended). As the world becomes increasingly digital, businesses now need to shift their focus on protecting their digital infrastructure the same way they do their physical one. One of the ways to do that is through cybersecurity insurance. If that sounds vague to you, below we explain what cybersecurity insurance is, and how it provides a layer of protection for your business.
What It Is and What It Isn’t
The first, and perhaps most important thing business owners must understand is that cybersecurity insurance is not a preventative measure. Car insurance doesn’t prevent you from getting in a car accident; smart and safe driving practices do. The same goes for cybersecurity. Your business first needs to take the necessary steps to prevent cybersecurity breaches before you can seek coverage.
Once a business does its due diligence and assesses the areas where they might need coverage, you can start shopping for insurance, but keep in mind, there is no standard for cybersecurity insurance. What is offered, and what you can get covered is completely based on your company and its specific needs. But to minimize premiums, the best practice is to first get your business as digitally secure as possible.
First vs Third Party Liability Coverage
First-party insurance is the one most companies will opt for. This covers the policy owner’s losses for a cyberattack. When an attack includes the loss of income, benefits, extortion, data theft, etc. the policy should cover it. In some instances, it can also cover the costs of discovering how the attack happened, and restoration efforts for not only the customers, but also the businesses’ reputation.
On the other hand, in most cases, third-party insurance is for situations where your business is in charge of setting up a security infrastructure, and helps to protect your business and employees if a breach happens because of an oversight or mistake you or your company make.
What Happens When a Company Discovers a Breach
When a breach happens, any company within the 50 states is legally obligated to notify all customers that are affected by the data breach. Of course, the actual discovery of most data breaches happen well after the breach actually took place. That being said, it is within the company’s best interest to report the breach to their cybersecurity insurance company as soon as it is discovered. Delayed responses could potentially negatively affect a settlement.
How Much Does Cybersecurity Insurance Cost
This varies by company, what industry the company is in, and the amount of annual revenue. The amount of protections needed also can increase premiums. The best way to keep your premiums down is to ensure your IT teams have cybersecurity training, and your employees regularly change their passwords and keep their anti-virus and other security protection software up to date.
We encourage you to take the necessary precautions to prevent cybercrime. You’ll find a little effort goes a long way in protecting your business and personal digital infrastructure.
We are excited to announce our partnership with INVISUS, an innovator and leader in cybersecurity and identity theft protection. With this partnership, AG dealers now have the ability to offer exceptional cybersecurity protection to their customers and receive additional RMR for these extra services. This timely partnership benefits our AG dealers and their customers. Reach out to INVISUS.
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