5 FAQs About Cyber Insurance

With the rise of cybercrime, cyber insurance is becoming increasingly critical for your business. Here are answers to the top 5 most frequently asked questions about cyber insurance.

1. What Is Cyber Insurance?

Cyber insurance is an insurance policy that helps cover expenses from cyberattacks, hackers, and data breaches.

Most standard business liability policies don’t it, so cyber liability insurance is often a separate policy

2. Why Is It Important?

Cyber attacks are very common, very expensive, and can put you out of business. Here are just a few sobering statistics:

  • 61% of SMBs experienced a cyberattack within the last year (Verizon)
  • The average cost of a data breach is over $4 million (IBM)
  • 60% of small businesses go OUT OF BUSINESS within 6 months of a cyber attack (Inc.com)

Any business that relies on technology–which is pretty much everyone–needs cyber insurance.

3. What’s Covered?

Cyber insurance typically covers expenses like:

  • Legal fees
  • Cost of notifying customers about a breach
  • Cost of restoring the identities of affected customers
  • Cost of recovering lost or stolen data
  • Repair of damaged computer systems

4. What’s Not Covered?

Cyber insurance typically won’t cover indirect expenses like:

  • Damages to your reputation
  • Loss of business
  • System upgrades

And, here’s the real catch: your insurance policy likely won’t pay out (or will charge you an arm and a leg) if you’re not putting basic cybersecurity measures in place–things like antivirus software, data backup, password policies, and two factor authentication.

In other words, cyber insurance is NOT an excuse to ignore your business’s cybersecurity.

5. Is Cyber Insurance Expensive?

The average cost of cyber insurance is around $1,500 per year.

One of the big factors that affects cost is your existing security. Like health insurance, no one wants to insure a smoker who skydives and has a whole list of claims.

The same goes for cyber insurance. If you’re doing risky things like ignoring cybersecurity best practices and constantly getting hacked, your rates are going to skyrocket.

Get the Right Cybersecurity in Place

If you’re considering cyber insurance and need help making sure you have the right cybersecurity measures in place, give us a call. We can provide the security services you need to keep those insurance premiums low.