The number of data breaches are constantly on the uprise, and they are costly. Business owners are taking preventative and proactive measures to secure and implement best cybersecurity practices. There is a virtually new kind of coverage – Cybersecurity Insurance. Cybersecurity insurance is designed to mitigate losses from a variety of cyber incidents, including data breaches, business interruption, and network damage. Cybersecurity insurance is a standalone coverage and designed to help cover costs of data breaches; however, it does not prevent companies from being subject to breaches.
There are two different types of cybersecurity insurance coverage: first and third-party. First-party coverage is protection for the data you own, such as information that pertains to your customers or employees. Third-party coverage provides protection for liability associated with your customers’ data, among other things. There are insurers that offer cybersecurity insurance policies with combined features of both first and third-party coverage plans.
Cybersecurity insurance policies can be expensive. Premiums are modified and adapted to fit a particular company’s needs and because of this, policies are timely and therefore, more costly. Cybersecurity Insurance policies are different from general liability. Premiums vary and are factored from your company’s practices, risks, exposures, financial state, etc. These policies do not cover theft of intellectual property. Although this may change in the future, cybersecurity insurance is still new and developing.
There are no businesses exempt to breaches or network damage. Making the investment in cybersecurity insurance can be a smart decision for your company’s protection against breach costs and damage. The safer your company gets, the more your premium will drop. Cybersecurity insurance mitigates risk and is a key role in building and creating a comprehensive plan for risk management.
Cybersecurity insurance increases and improves cybersecurity with the benefits of good security, and internalizing of the costs of poor security. There are many benefits that coincide with investing in cybersecurity insurance. Grow your security, because the number (and costs) of breaches are growing.