Data security has become a much-discussed topic everywhere these days. Within a few minutes of browsing the internet, you can find dozens of articles and news stories about data breach incidents all over the world. According to the data collected by Breach Level Index, over 2.6 billion records were compromised in 2017. This means, about 5,000 records were hacked into every minute of every day. Pretty scary stuff!
No wonder, that data security is at the forefront of everyone’s mind.
Small businesses are the primary targets of data breaches, precisely because they typically do not invest heavily in data security. Some business owners are not as tech savvy as the modern world demands; others mistakenly believe that being a small operation, makes them invisible to the cybercriminals. So it’s essential for small businesses especially, to take steps to protect themselves and their customers and minimize the data breach risk we all face.
Cyber insurance is the policy that protects from the financial fallout of a cyber attack and its aftermath. Notification costs, PR response, and other critical coverages make this policy a powerful tool in your “crisis response” arsenal.
Helping you get back on your financial feet after the attack is not the only benefit of your cyber insurance policy. In fact, there are a few more benefits that it provides but few people realize it.
The Benefits of a Cyber Insurance Policy
Maintain Security Standards:
It’s not enough just to implement security measures. It’s vital also to maintain them. When reviewing your application for insurance, your underwriter will ask about your security standards and their maintenance.
Loss Control Services:
Some insurance companies provide free or discounted loss control services to their insureds. These services also called “loss prevention services” can be invaluable to point out the so-called holes in the security countermeasures of your business. Some of the loss control services may include a summary of the company’s security practices, suggestions for improvements, etc.
This is a service that encompasses a few elements illustrated below. Breach hotline may offer the following:
- Cybersecurity experts to help with incident response, forensics, and repairs.
- Attorneys if legal issues arise due to a cyber-attack or a data breach
- Marketing professionals ready to repair your business reputation.
If a loss does happen and records are compromised, you might be facing legal action from the affected individuals. In that case, you will need an experienced attorney on your side. Your insurer will provide you with a list of recommended attorneys who are experts in defending cyber-related lawsuits and a mountain of legal fees.
Data Breach Response Resources:
Besides an attorney, you will have a whole checklist of things that need to get done and fast. You will need to notify affected individuals and appropriate regulatory authorities, set up credit monitoring, act swiftly with a PR campaign to combat bad press and countless other tasks. Your insurer will help guide you through this complex process and will help make sure all the tasks are completed timely and appropriately.
Cyber insurance pays out more claims than any other line of insurance. Denials of coverage are few (although of course, they happen as well) so naturally, the insurer is very much interested in seeing your security measures maintained and updated. As the saying goes, “plan for the best, prepare for the worst”. A cyber insurance policy and all the benefits it provides prepare you for the worst – a data breach incident affecting your customers. But having your insurer in your corner at least you are not alone in dealing with it.