You'll never meet bigger fans of big data than the guys behind Insurance Soup. There's no way we could market as effectively as we do without using it. But, even while it's true that businesses can attribute much success to their access to data, as we're seeing lately, this success can come at the cost of a security breach due to cyber hackers.
Businesses are becoming more and more vulnerable to cyber attacks which can negatively affect the company's financial well-being, it's reputation, its employees and even lead to lawsuits. Now, more than ever, there is a greater need to protect companies from liabilities arising out of data loss or theft.
Cyber insurance - or cyber liability insurance - is considered specialty insurance product and covers a business' liability for a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver's license numbers and health records. It protects corporate companies, small businesses, and even individuals from risks introduced by information technologies.
In addition to covering legal fees and expenses in the event of a cyber breach, cyber insurance typically helps making customers aware of a breach to their data, the costs necessary to restore the personal identities of customers affected by the breach, the recovery of the compromised data and repairs to damaged computer systems.
However, there are things that cyber insurance can't protect against and an organization will need to make sure it understands what is covered and perhaps more importantly what isn't covered when they sign up to a coverage plan. While having some form of cyber insurance in place can help a business in the event of an attack, a business is also responsible for its own cybersecurity – the responsibility isn't something that is just shifted to the insurer.
It used to be that only companies that stored or processed personal data for its customers felt the need for this insurance. Understandably, keeping such data safe was (and still is) a high priority. Now, lots of companies understand the importance of the reliability and inter-connectivity of their systems. More importantly, they understand the responsibility of protecting the data of not only their customers, but also their employees, vendors, and stakeholders.
Small businesses maintain the personal information of customers but are much easier to hack, making them prime targets for hackers and cyber criminals. A single claim can be costly and difficult to overcome on your own. Cyber security insurance helps reduce the potentially devastating effects of a claim. It can cover costs related to IT forensics investigation, data restoration, legal liability and customer notification. This makes cyber insurance imperative to the financial well-being and future of businesses large and small.
A cyber insurance policy allows your clients to spend less time worrying about cyber threats, and more on running their businesses effectively. As businesses continue to become more reliant on technology, the threat of a cyber breach will grow.
Your clients may not know everything about cyber insurance. But if they understand the risks involved with cyber and the costs a policy will cover, that’s a hugely important first step to getting them to see the importance of cyber insurance. Don’t overlook the opportunity to provide your clients with cyber coverage to protect against emerging risks at a reasonable cost.