Technology and the Internet have tremendously influenced how most organizations do business today. Unfortunately, along with these technological advancements are cyber crimes which have put businesses into higher risks for security and data losses. This is where cyber insurance plays a key role — to protect businesses from severe financial loss in the event of a cyber attack.
Cyber Insurance ‒ What It Is Exactly
Cyber attacks have become all too common today. Many organizations suffer from moderate to severe losses resulting from a data breach. Cyber insurances are specifically designed to mitigate the financial risks involved from the consequential costs of cyber attacks including the offset costs needed for recovery. Today, there are already different types of cyber insurance policies and cover any of the following:
- Losses from threats of cyber extortions
- Identity recovery protection
- Data compromise and monitoring protection
- Notification costs which refer to the costs needed to inform the parties potentially affected by the data breach
- Damage to your organization’s reputation
7 Important Reasons Why Your Business Should Have Cyber Insurance
In some cases, cyber attacks can cause a halt in production and affect an organization’s productivity and ultimately profitability. But that doesn’t end there. Often, data breaches can do more harm in terms of damaging an organization’s reputation and putting their employees and customers’ sensitive information at risk.
The following are seven of the top reasons why an organization needs cyber insurance coverage:
- Cyber crimes are real, and they are rapidly growing today putting both small and large organizations at risk at an increasing rate.
- Every organization that uses internet connection has a network and possesses sensitive information including account numbers, credit card information, contact numbers, Social security numbers, driver’s licenses, and many others which are at risk of cyber attacks.
- Your organization will be held legally and financially liable should a third party data be compromised by a data breach.
- Security breaches are costly and could seriously compromise your business’s financial viability. The costs associated with a data breach can be unpredictable; cyber insurance policies can help offset these costs.
- Cyber insurance offers the next level of protection to your business and promotes your business sustainability from the crippling costs associated with cyber crimes.
- Cyber liability insurance is a smart risk management and offers the much–needed protection should a cyber incident occur.
- General liability insurance typically only covers property damage, but cyber insurances cover first party and third party damages and claims caused by cyber attacks.
Setting the Path Towards Becoming a Cyber Resilient Business
You might think that cybersecurity would be the last thing your small or medium scale business should be concerned about because cyber thieves are only after large enterprises, then it’s time you think again.
Remarkably, even small businesses are susceptible to data and security breaches. That said, every organization regardless of size or industry should take action to protect themselves from the crippling financial losses in the event of a cyber attack.
The next cybercrime could be targeting your business, so protect your business today by purchasing a cyber insurance policy.