It’s tempting to assume that a data breach or loss is never going to occur at your company. Unfortunately, that assumption isn’t a reflection of reality. Data is lost every day. Sometimes, that data loss is accidental. Other times, the loss is the result of hackers. When that loss occurs, will your business be covered?
Will your business be covered in the event of an accidental loss?
Perhaps an employee shares a file without encrypting it first, or an employee loses a laptop during a business trip. What happens if the information on that file or laptop falls into the wrong hands? Would one of your customers sue you for damages? Could your business withstand a lawsuit as well as the repercussions of that data loss?
Will your business be covered if it is hacked?
Hacking occurs every day in a variety of ways. It sometimes occurs via spam, phishing, botnets, and viruses. No matter the method, the result is the same: a data breach and, in some cases, an interruption to your business’ services. What would happen in that scenario? Would your business be able to recover from an interruption in its services? Would your customers leave you? Sue you?
How can cyber insurance protect your business?
Because cyber insurance is relatively new, it isn’t highly regulated yet. That means you have to be proactive when it comes to such policies. Make sure they include the coverages you need. Ask the following questions, in addition to visiting with an insurance broker such as Flor, in order to ascertain whether you have found a suitable policy:
- Does it cover property damage, such as damages to your servers and hard drives?
- Does it provide coverage for interruptions to your business?
- Does it cover costs associated with court fees or other third-party claims?
- Does it provide coverage for compliance with state and federal entities?
- Does it cover costs incurred in connection with a government investigation?
- Does it pay for the costs of credit monitoring for consumers or of notifying those consumers?
A cyber insurance policy should offer coverages in all those areas. If it does, you may have found the right insurance policy for your business. If it doesn’t, you should continue looking.
What concerns do you have about data breaches? Have you heard of cyber insurance? Would it be a worthwhile investment for your business? Why or why not? Let us know in the comments.