Over the past few decades, the world of work has gone through a revolution: high-tech and digital tools have pushed aside paper-based and analog practices. However, advancements in technology have not gone unnoticed by criminals. On the contrary, cyberattacks are increasingly common, affecting individuals, businesses, and entire countries. Hackers can gain access to your system and data and use that to steal confidential information, trade secrets, money, identities, and anything else that could be used for gaining influence or wealth.
Considering how dependent we all are on computers, cyber insurance is as essential as ever. Despite that, many business owners are oblivious to its existence and importance. This guide will take you through the basics of cyber insurance, what it covers, and how to get your money’s worth.
Cyber insurance, also known as cyber liability insurance coverage (CLIC), is a policy for covering the costs associated with cybercrimes such as phishing, malware, ransomware, and distributed denial-of-service (DDoS) attacks.
Typically, cyber insurance covers both first-party and third-party damages.
First-party coverage applies to harm directly to your firm from a hacker attack or other cybercrime. Third-party coverage covers the costs you owe to other firms or people who have been adversely affected by an attack to your business.
Cybercrime is increasing even as many other forms of crime are falling. Not even small businesses are safe. According to Symantec, 30% of phishing attacks in 2015 were against organizations with less than 250 employees. Furthermore, Symantec’s 2016 Internet Security Threat Report revealed that 43% of all attacks in 2015 had been against small businesses.
Clearly, small businesses could use the extra protection and peace of mind that insurance provides.
Cyber insurance coverage is split into two: first-party and third-party coverages.
First-party coverages typically include:
Third-party liability coverages include:
Third-party coverages are typically claims-made, which means that the policy covers claims no matter when the claim event occurred. This is a popular option when there is a delay between when events occur and when the claim is filed. This often applies to risks involved in business operations. However, the claims are only covered while the policy is active.
Before you go to an insurance agency or sign any papers, do some research and familiarize yourself with the different factors that affect the policy’s cost. Here are some things you can do to ensure you get the policy that meets your needs at the most reasonable price:
Whether you want to get an insurance policy right away or take some time to evaluate your options, email us or fill out the free quote form on our website to get started.
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