Data breaches exposed 5 billion records in 2018 alone. People are demanding better security for their data. Governments are tightening regulations around collecting and keeping data.
It’s little wonder that business owners are looking for ways to protect themselves. Some are investing in cybersecurity. Even the most iron-clad defense can’t protect you from every attack though.
Many business owners are now wondering if they should invest in cyber insurance too. You may feel that an insurance policy is the right way to protect your business.
If so, you’re wondering how to pick between cyber insurance providers. We’ve put together this guide to help.
What is Cyber Insurance?
Before you compare providers, take a look at what a cyber insurance policy includes.
Cyber liability insurance protects your business in the event of a breach. The average cost of a data breach is $200,000 for small businesses. If you have to shoulder that cost alone, you may have to close your doors.
An insurance policy can help you bear the costs of a breach.
Of course, you still have to invest in your cybersecurity. If you leave the door open to attackers, your insurance policy will likely be void.
Another reason to invest in security is to lower the cyber security insurance cost. If you can show your provider all the steps you’re taking to stay safe, they’ll likely deem you lower risk.
You should be sure you’re well aware of the kinds of attacks you’re most likely to face. You need to take reasonable steps to prevent them. You’ll also need to make sure the insurance policy you buy covers them.
Cyber Insurance Providers Should be Knowledgeable
Now we get into questions about providers themselves. Cyber liability insurance is still relatively new. The provider you choose should still be knowledgeable about the field.
That means they should be aware of the kinds of attacks businesses currently face. They should also be looking at evolving threats.
Phishing attacks might be the most dangerous type of attack today. Tomorrow, it might be botnets.
Your Provider Should be Adaptable
Building on knowledge of the field, your insurance provider should be forward-thinking. As we noted, the types of threats facing businesses are constantly evolving. Just look at the fact that viruses have taken a back seat to ransomware and root kits.
This means your policy shouldn’t be so set in stone that you need to rewrite it every time a new threat appears. As cyberattacks evolve, so too should your provider’s approach to coverage.
Coverage for First-Party Damages
One of the issues with policies right now is each cyber insurance company can offer their own unique policy. There’s no such thing as a standard on the market right now.
That makes it much more difficult to compare policies between providers. So, how do you know you’re getting the best deal?
One thing you should look for is first-party coverage. The policy should cover immediate expenses related to a breach, including:
- Repairing damaged software and hardware
- Business interruption costs
- Extortion money, often associated with ransomware attacks
- Notifying employees, customers, and the public
- Protecting your reputation through marketing and public relations
A good policy will cover related costs, such as credit monitoring for your customers.
Coverage for Third-Party Damages
When you’re comparing policies, make sure there are provisions for third-party costs. Some companies will cover more than others.
Some of the common costs associated with security breaches include:
- Fines from governments and regulators
- Privacy lawsuits from customers or employees
- Copyright infringement claims
- Breach of contract claims
- Negligence claims
Coverage for these sorts of damages make the cyber insurance cost more than worth your while.
Social Engineering Coverage
We’ve already mentioned phishing attacks, which are a form of social engineering. In a phishing attack, a hacker poses as a figure of trust or authority. They then trick your employees into giving up sensitive information.
Many insurance providers see social engineering attacks as particularly risky. Protection against social engineering relies on your staff recognizing suspicious messages. That’s one reason providers don’t offer coverage for this type of attack.
You should see if you can find a provider who offers coverage for social engineering attacks. Some providers do offer this kind of coverage as an add-on for a more basic policy.
Another feature you should ask about is retroactive coverage. Many providers will allow you to make claims for attacks that happened in the recent past.
The reason here is simple. It takes the average company months to uncover an attack. If you sign up for a policy today and discover your firm was breached three months ago, you may not be covered.
Retroactive coverage can help you reduce this risk. Before you get a policy, you may want to conduct an advanced penetration test. This can identify any previous attacks or breach attempts.
What’s Not Covered?
Keep in mind that a cyber insurance policy is meant to cover breaches and attacks. It isn’t designed to cover things like bodily damage or criminal activity. If an employee damages your systems or uses your network to commit fraud, you need different types of business insurance.
Cyber Liability Insurance Cost
Finally, you’ll want to compare costs across providers.
Keep in mind that the lowest price isn’t always the best deal. This is especially true when it comes to cyber insurance.
Some policies may come with a higher price, but they may also offer you more extensive coverage. A few extra dollars on the policy could save you more in the long run.
Protect What You’ve Built
The cyber insurance market is small, but growing. Compare cyber insurance providers carefully. Ask plenty of questions about what their policies cover.
You put tons of time and effort into building your business. Learn about all the different ways you can protect it with our informative articles.