For many small business owners, they think of risk management in terms of finances, property insurance, and even professional insurance. Many of them don’t think in terms of cybersecurity or cybersecurity insurance. Better than half of small business owners don’t worry about a cyber attack or hack, yet SMBs are often the target of such attacks.
If you’re wondering what options you have in terms of managing cyber attack risks, cyber insurance coverage is one of the big steps you can take. Not sure what the benefits, costs, and coverage are for cyber insurance? Keep reading for a fast guide to what you can expect.
What Is Cyber Insurance?
Cyber insurance helps businesses cover the damages after a cyber attack or a data breach. It’s often an optional add-on for things like a business owner’s policy. You can also find cyber liability insurance as a standalone policy that you can bundle with other business insurance policies.
What Does Cyber Insurance Cover?
Cyber insurance offers fairly broad coverage related to cyber attacks and data breaches. Some of the more common pieces of coverage include:
- Legal costs
- Cyber forensics
- Services for affected customers
- Repairing your computer systems
- PR costs
- Data recovery
Depending on which cyber insurance companies you look at for policies, some will also cover things like lost income due to the attack or breach. With so much information stored on network-connected computers and servers these days, virtually no business in any industry is immune to a potential attack.
Cyber Insurance Benefits
One of the key cyber liability insurance benefits is that it offers you some peace of mind. With such a high probability that your data or systems will come under attack, knowing the insurance policy is there can limit the stress.
It’s also a proactive step you can take to help ensure your customers won’t suffer more than necessary if your system does get breached.
Since most insurance companies require that your systems meet certain minimum security thresholds, it’s a good way of testing whether you’re taking the right steps.
Cyber Insurance Costs
The exact security setup you put in place with your IT infrastructure will affect the overall cost of your policy. On average, however, those policies will run somewhere between $1500 and $2000 for most small businesses. Larger companies that deal with more data or use more lax security may pay more for a policy.
Cyber Insurance Coverage and You
While you may never face a cyber attack or data breach in your business, it’s not something you can bank on. The odds remain against you escaping entirely. That means cyber insurance coverage is something that you need.
It’s a fairly good investment, too, since it helps you manage most of the major expenses you’re likely to face after an attack. Although, it should be noted that most policies exclude financial losses from reputational damage from their coverage.
Looking for more tips on business or cyber insurance options? Check out the posts over in our Business and Technology sections.