September 2013: While you’re being super-diligent about protecting your company’s data, you may also to do something just as important: CYA. In this case, that also means Cover Your Assets!
Cyber security insurance can cover you for things like data breaches, network damage, cyber extortion, damage-control PR and other unpleasantries, including the cost of getting back up to speed after a cyber attack. If your company hasn’t yet integrated it with your other insurance, here are four big reasons to cover your cyber risk:
1. It can protect you legally.
If you are responsible for the personal data of customers, clients, patients or others, you may also be liable if a hacker gets into your system and steals that data.
2. It can cover post-event expenses that might otherwise bankrupt you.
Repairing the damage from a cyber attack can be expensive, especially when you include the cost of repairing the damage to your reputation — PR firms are not cheap! Neither are lawsuits, regulatory fines and business interruptions. Being able to cover your operating expenses while you figure out what happened, notify everybody and then fix the problem can be the difference between moving beyond the crisis and going out of business. Keep in mind that 100% of your costs may not be covered.
3. It can be more affordable than you think.
Just like any other insurance you buy, cyber security insurance policies are based on your level of risk and liabilities. The better your company is at creating a secure cyber environment, the lower the likelihood that you’ll have to make a claim. And the lower your premiums will be.
4. It can be more cost-effective than trying to plug every tiny IT hole.
Chances are you can’t afford to have the level of security that will protect you from every obscure vulnerability, including intellectual property issues — 100% protection is impossible. Cyber security insurance covers the gap between being diligent and being perfect.
The cyber insurance industry is growing fast, partly because businesses are now more worried about cyber risks than traditional business risks. In fact, research by Experian Data Breach Resolution and the Ponemon Institute found that 57% of companies surveyed without cyber insurance currently are considering getting it in the near future. The White House is also pushing for a cyber insurance market as a market-driven approach to increasing cyber security across the nation. As more businesses purchase cyber insurance, they’ll take more cyber-smart actions to reduce their risk so they drive down their premiums.