As we’ve discussed in previous blog articles this month, it’s Cybersecurity Awareness Month, courtesy of the CISA (Cybersecurity and Infrastructure Security Agency). During this month, we’ve talked about the importance of cyber security, statistics on cyberattacks, and the interplay between two vital insurance policies: cyber insurance and business interruption.
Here at AHI Group, your business’s security is our business. We aim to help inform business owners by equipping them with the best practices to protect their businesses against digital threats. Although cyber insurance is just one piece of a much larger puzzle, today we’re focusing on the topic of why your business needs cyber insurance, how cyber insurance can help, and what to look for in a policy.
What Businesses Need Cyber Insurance?
If your business stores or processes any information vital to its operations or that are considered private information (especially data containing information about clients) then you should heavily consider cybersecurity insurance. Consider the implementation of a cyber insurance policy, especially if you keep any cyber data that includes customer names, addresses, medical records, financial information (like credit card numbers) and even Social Security numbers.
Few industries, if any, are required to have cyber insurance. In some instances and with certain partnerships, it may be requested of you to obtain cyber insurance to protect another party and any of their data you’re handling. IT companies, for example, might be contractually obligated to have some form of cyber insurance. Otherwise, this new product is a relatively new offering and may not be required depending on your industry.
How Cyber Insurance Can Help Your Business
Cyber insurance is a type of business insurance product that is curated toward helping businesses, small and large, recover from cyber attacks as a result of phishing scams, networking threats, ransomware, and more. Cyber insurance can help protect your business against a huge range of threats, such as:
- Cyber extortion, or ransomware (which we’ve covered in a previous post!), which is an event that occurs where a cyber thief makes a demand for payment upon compromising your data or restricting your access to your networks.
- Breaches of data, such as when you lose confidential or personal information, or a cyber criminal has had unauthorized access to your personal information.
- A denial-of-service attack or technological failure, where a cyberattack results in the inability to access your online services.
Attacks vary in scale and cost, but they’re all disruptive. Cyber insurance helps to cover the costs that could come out of a successful cyber attack, including costs to notify affected parties, legal representation, the costs to restore damaged, lost, or corrupted data, and the outsourcing of a firm to investigate the breach’s source.
Most businesses purchase stand-alone policies with coverage specifically curated to cyber risks. Other businesses will opt for a business insurance endorsement that may supplement, modify, or increase existing cyber insurance coverage. Ask an AHI representative about which option is best for you.
What to Look For in a Cybersecurity Insurance Policy
In an age where digital threats loom large and cyberattacks have become an unfortunate reality, protecting your business from the potentially devastating consequences of a breach has never been more critical. Cyber insurance is the armor that can safeguard your business from financial ruin and reputational damage in the event of a cyber incident.
Financial Protection
Cyber insurance is designed to provide financial coverage in the wake of a cyberattack or data breach. These incidents can lead to substantial financial losses, ranging from the cost of investigating the breach, restoring compromised systems, notifying affected parties, and even potential legal actions. Without cyber insurance, these expenses can overwhelm a business. With the right policy in place, you can mitigate these financial burdens and ensure that your business can weather the financial storm.
Business Continuity
One of the most significant benefits of cyber insurance is its ability to support business continuity. When a cyber incident disrupts your operations, business interruption coverage within your cyber insurance policy comes to the rescue. It helps cover lost income and ongoing expenses like salaries and rent, ensuring that your business remains financially stable during the recovery process. This can be the difference between a business that thrives despite the interruption and one that struggles to recover.
Data Breach Response
A critical component of cyber insurance is the support it offers during a data breach. This includes access to a network of experts who can help your business navigate the breach, manage the response, and meet legal and regulatory obligations. Having this expertise at your disposal can make the process significantly smoother and more efficient, minimizing the damage to your business’s reputation.
Reputation Management
The fallout from a cyber incident can extend to your business’s reputation. Customers and partners may lose trust in your ability to protect their data, leading to long-term damage. Many cyber insurance policies offer reputation management services to help mitigate the impact of a breach on your brand and rebuild trust.
Customized Coverage
Cyber insurance is not a one-size-fits-all solution. Policies can be tailored to meet the specific needs of your business. Whether you’re a small startup or a large corporation, there is a cyber insurance policy that can be crafted to address your unique risks and circumstances.
This Cyber Month, AHI has aimed to educate, inform, and raise awareness about the growing and ever-evolving threat of cyber risks. We hope that we’ve done our part in showing you just how costly cyber attacks can be, as well as providing you with the tools you need to keep your business safe. And, as always, we’re happy to chat about the best ways to manage your business’s risk. Give us a call today.
