There are few companies that don’t have some degree of online presence these days. Even the smallest businesses often have websites and conduct a few transactions online. This means that your company needs to protect itself online as much as it can.
There are hackers out there who might try to get control over your site and force you to pay a ransom, or they’ll release your trade secrets or customer information. This is happening more and more, and it can bankrupt your company or hurt your industry standing.
That’s why cyber liability insurance exists. It’s a relatively new phenomenon, and we’ll talk about it briefly in this article. You may decide that getting it is worth it once you hear what it’s all about.
What Precisely is Cyber Liability Insurance?
The FBI has what they call an Internet Crime Complaint Center. Every year, that entity gets more reports. In 2020, cyber losses totaled $4.1 billion.
To prevent becoming one of the companies that has to cough up some of that money to a hacker, you can look into cyber liability insurance that many insurance companies now offer. Essentially, it is insurance that covers activities like hacking, employee errors, and data breaches.
It can also cover compromised systems and regulatory breaches. The more you think about how common these events are these days, the more attractive this insurance variety is probably going to sound to you.
What Are Some Practical Ways this Insurance Helps You?
Once you get this insurance type for your business, you can probably breathe a lot easier regarding your online presence. You can rely on the money from this insurance policy if hackers crash your company’s website and you lose revenue for a few days or even longer.
You can also use the money from this insurance policy to hire investigators who can determine what happened to your site. They can recommend security measures you can put in place to ensure that it does not happen again.
If a hacker is extorting you, and you decide you have no choice but to pay them, that money can come from this insurance policy. You can also use the policy money to hire a crisis management consultant if you know that your business’s reputation will take a hit because of what happened.
When Should You Get this Insurance?
If you don’t have this insurance yet, you probably should not delay in getting it. If you use a software suite into which your employees log in from either a centralized location or many scattered ones, you should certainly get this insurance type.
You should also get this insurance variety if you’re thinking about expanding your business. Expansion can boost your reputation, but any time you start moving into new territory, you often open yourself up to cyberattacks.
What Do Insurance Companies Require for You to Get This Insurance Variety?
It’s worth noting that if you approach an insurance company and say that you want cyber liability insurance, they’re probably going to give it to you, but they will demand certain compliance measures from you before they cover you fully. For instance, they’re going to want you to set up multi-factor authentication either in your workplace or in all remote locations if you’re letting your employees work from home at all.
They will also want you to encrypt any of your sensitive data that’s traveling through your network. This way, even if someone unauthorized does intercept it, they will not be able to use it.
Since you should be taking these security precautions anyway, it is not too onerous of a responsibility to set them up. This allows you to get the cyber liability insurance coverage you want, and you’re also instilling your workers with good habits that they should know about anyway.
Should You Get It?
Ultimately, you don’t have to get this insurance variety if you don’t want to. It’s not as though any governing body can make you do it, and if you feel like you can’t afford it, you might opt to skip it.
If you do that, though, it’s gambling. You’re putting your money, quite literally, on no cyberattack happening to your business.
You might get lucky, and a cyberattack will never occur. Not having insurance, though, is likely going to bite you eventually. The rise in cyberattacks is only going to continue, and more companies feel like getting this insurance variety is worth it versus those who aren’t willing to pay.