Cyber liability insurance is a policy that all businesses should carry to prevent a malicious attack that could sink them. Cybercrime can financially destroy a business and damage its reputation. While you can boost your security with employee training, firewalls, and other protection, there’s always the chance an enterprising hacker will find a way through. Cyber liability insurance limits the impact on your operations, protects customers, and helps you recover after an attack. Of course, needs vary by business, so determining the right amount of coverage requires some research.
Look at Cyber Liability Insurance for Your Industry
Hackers target specific industries for the value of their data:
- Manufacturing
- Government
- Healthcare
- Financial services
- Retail
If your business is in the high-risk category, you’ll need more coverage and will likely have a higher premium.
The size of your company also plays a role in determining how much cyber liability coverage your business needs. Unfortunately, small businesses don’t have a free pass — hackers often target small enterprises since they’re less likely to have the resources to protect themselves. However, a limited workforce and information technology systems may make monitoring risks easier. As a result, small businesses may have a less expensive premium than large corporations.
Compare Third-Party and First-Party Options
Depending on your services, you may need third-party cyber liability protection, first-party protection, or both. Third-party insurance covers breaches affecting data from clients, subcontractors, or vendors. For example, if your company accepts credit card payments and that information gets stolen, third-party insurance will pay for legal expenses should the customers decide to sue.
First-party insurance covers cybercrime that affects your organization’s data, such as employee, financial, and trade secret information. Policies usually pay for the following:
- Business interruption expenses
- Public relations
- Crisis management
- Customer notification
- Hiring cybersecurity investigators
Consider Your Budget
If you have a small company, cyber liability coverage may be necessary. When you consider the expenses of lost business, compromised data, and systems held for ransom, you can’t afford to forego it. Even with narrow margins, there are ways to keep your company safe.
The first step is risk analysis. What are the cybercrimes you’re most likely to experience? What is the likelihood they will occur? By recognizing the most prominent dangers, you can efficiently protect your systems without going over budget.
Second, you can decrease the cost of insurance by being proactive. Robust security policies lower the chance of a successful breach, which means a lower risk to the bottom line. That translates into a reasonable monthly payment.
Reevaluate Your Cyber Liability Insurance Needs
Unfortunately, cybercriminals are an innovative bunch. Every year, there are new scams and hacker technology to worry about; security is often a game of catch-up, leaving organizations vulnerable until experts release new countermeasures.
Your company also changes year-by-year by bringing new clients, launching products, and expanding your services. As a result, next year’s cybersecurity concerns may look very different from today’s.
To stay protected, reevaluate your risks, beef up your security, and analyze the new cybersecurity landscape. Doing so will let you know whether your current cyber liability insurance policy is still appropriate. If you find significant gaps, it’s time to upgrade.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
