Exploring Cyber Insurance Coverage Options
If your business is considering cyber insurance, you should discuss with your insurance agent what policy best fits your company’s needs; first-party coverage, third-party coverage, or both.
First-party coverage protects your data, including employee and customer information. Businesses that store their own financial data and any personal customer data should at least consider first-party coverage.
This coverage typically includes your business’s costs related to:
- Legal counsel to determine your notification and regulatory obligations
- Recovery or replacement of lost or stolen data
- Hardware/software repairs
- Client notification and call center services
- Lost revenue
- Crisis management
- Public relations
- Cyber extortion and fraud
- Forensic services to investigate the breach
- Fees, fines, and penalties related to the cyber incident
Third-party cyber coverage generally protects you from liability if a third party brings claims against you. If you store more significant personal information about your customers, you will want to investigate third-party coverage. Unlike first-party coverage, this type of policy covers legal fees and judgments in cases where people sue your business for damages caused by a cyberattack.
This coverage normally includes:
- Payouts to consumers affected by the breach
- Claims and settlement expenses relating to disputes or lawsuits
- Losses related to defamation and copyright or trademark infringement
- Costs for litigation and responding to regulatory inquiries
- Fines for compliance regulations
- Other settlements, damages, and judgements
- Accounting costs
Many businesses are turned off by the cost of cyber insurance, but what they fail to consider is the cost of a cyberattack is way more detrimental to the business. To truly understand the value of cybersecurity insurance, your agent can help you assess your risk level and potential premiums to determine if it’s the right investment for your company. Without sufficient coverage, many businesses might not be able to bounce back after a cyber incident.
Even if your business moves forward with cyber insurance, you still need to make sure you have proper cybersecurity measures in place. 2W Tech is a technology service provider specializing in solutions for the manufacturing industry. Give us a call and let our IT Consultants help ensure you are using the best cybersecurity solutions to protect your business.