If you’re a business owner, whether big or small, you might be thinking about cyber insurance and whether this is something you need to invest in.
Well, in today’s digital world, when data is as good as currency, this is certainly something you need to be thinking about.
However, this can be a more complex issue, particularly if you don’t know much about cyber security or you don’t believe your company poses much of a risk.
Unfortunately, any company can be the target of cybercrime, so you need to think carefully about whether you need this kind of cover and how this can be tailored to meet your specific business needs.
In the guide below, we hope to shed some light on the subject for you. We’ll take a look at what cyber insurance covers and seven reasons you might need it.
What is cyber insurance?
Cyber insurance, sometimes called cyber liability insurance, is a policy designed to protect businesses from new-age threats like data breaches and cyber attacks, such as phishing and social engineering.
Within this, a good policy will cover legal counsel, recovery efforts, lost income, investigation fees and more.
Breaches and cyber attacks can be very costly to a business and in some cases, can be impossible to recover from. This is why it’s crucial that you think about these policies. Typically, this is not covered within traditional liability insurance, so you need to think about and purchase cyber insurance separately.
Reasons you might need to get cyber insurance
In most cases, buying cyber insurance is a choice, but it’s one that should be easy to make. There are several key reasons that you need to protect your company with this type of policy and these include:
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To comply with the law
Let’s kick off with arguably the most important reason you might need cyber insurance and that is to ensure that your company is complying with the law at all times. Should a data breach happen, the last thing you need is to be penalised by the law as well as having to deal with the attack and recover from the damage.
And the good news is, if you’re feeling a little unsure about the rules and regulations your business has to follow, the experts can help. Insurance providers can guide you through what your company needs to do to comply and help you get the perfect policy in place.
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Because you handle a lot of data
The second most important reason for getting cyber insurance is if your business handles huge amounts of sensitive data.
It doesn’t matter what form this comes in, whether that’s card details, names, addresses, birthdays or anything else. If you collect personal data that is private and could be exploited, you need to make sure that you’re being proactive and doing everything you can to protect this.
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To cover costs and protect your future
Unfortunately, a cyber attack can be very expensive.
Nowadays, pretty much every business, whether selling goods or services, will manage sensitive information like credit card numbers or account numbers. If this is lost or stolen, removing this data comes at a huge price.
Not only this, but attacks like ransomware are becoming a more common threat. This is a type of malware that threatens or blocks data unless your business is prepared to pay a ransom. This can be another costly scenario. Not to mention the fact that you could be contending with legal, accounting and IT fees on top of this as you try to handle and recover from a cyber attack.
So, if you want to protect your finances and cover yourself for these eventualities, then you need the right cover.
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Because size doesn’t matter
You might be thinking that your business is just a small independent company and therefore not of any real interest to cybercriminals. Sadly, this is not the case. If you handle any amount of sensitive data then you could be a target.
In fact, many hackers and criminals prefer to target smaller companies as they tend to have less protection and resources to fight them off.
So, although your business may be small, cybercrime is big right now and you need to make sure you cover yourselves, regardless of the size of your company.
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To tackle the rising amount of cybercrime
Cybercrime is on the rise, especially as criminals find new ways to exploit systems and make money. With this in mind, investing in cyber insurance is an important way to future-proof your business.
With the right policy in place, you can limit the damage of an attack and ensure it doesn’t cost you the business.
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Because you want to be a trusted company
Whether it’s customers, clients, employees, vendors or anyone else for that matter, you need to make your business look as credible as possible. You also want to build trust with everyone that keeps your business afloat and keeps the wheels turning.
Having cyber insurance proves that you care about the sensitive data you hold, and can make you a more reliable and trusted source and employer.
For example, when putting together literature for new hires or creating contracts for new clients, it’s helpful to be able to include details of your cyber insurance policy. This can be reassuring and proves that you are proactive about data protection and the safety of everyone working in or with your company.
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For your own peace of mind
Last but not least, one of the key reasons you might wish to get cyber insurance is for your own peace of mind. Sure, the likelihood is that you’ll pay out for your policy each year without having to claim back, but you don’t want to take the risk in case you do need to make a claim.
After all, the last thing you want is to ignore cyber insurance and then fall victim to a crime that costs you big – and possibly even costs you your business.
