Is your business prepared for a data breach? Chances are, unless you have data breach insurance in place, the answer is no.
Data breaches are becoming increasingly common, and if your business isn’t properly insured, the consequences can be devastating.
Data breaches resulted in the exposure of approximately 15 million records worldwide during the third quarter of 2022 – a 37 percent increase compared to the previous quarter.
So what is data breach insurance , and why do you need it? Read on to find out.
Defining Cyber Data Breach Insurance: What Is it and What Does it Cover?
There are many reasons why data breaches occur. A hacker can get into your company’s network and steal data, shut down your system, and access intellectual property or proprietary documents. Employees in your business might lose or steal company equipment that contains confidential information, share passwords, or send sensitive information by mistake.
That’s where data breach insurance comes in – a form of cyber security coverage designed to protect your business from fallout that cyberattacks can bring on.
As cyber attacks become increasingly common, cyber data breach insurance helps you safeguard digital assets and mitigate online risk.
Nobody Cares About Cyber Data Breach Insurance…
Till you get breached and remediation costs start running into the six figures. Learn why cyber insurance is integral to your IT security
But what does data breach insurance cover , exactly? Such insurance covers the cost s associated with:
- Notifying affected customers, patients or employees
- Hiring a public relations firm to deal with reputational damage following a data breach
- Credit monitoring services to data breach victims
Additional coverages included within data breach insurance are as follows:
- Business income and expense coverage : to replace income lost if a data breach prevents you from running your business.
- Prior acts coverage : to cover claims arising from breaches that occurred prior to the effective date of your policy.
- Extortion coverage : to cover the amount you paid if someone takes your business’ data and demands a ransom.
By investing in cyber data breach insurance , your organization remains safe while gaining peace of mind knowing you have a plan in place should you experience a cyberattack.
Read on to explore the importance of data breach insurance and general liability insurance in further detail.
Is There A Difference Between Cyber Liability Insurance & Data Breach Insurance?
Is there a difference between cyber liability and data breach insurance?
The answer to your question is yes.
Cyber liability insurance covers both monetary losses and provides legal protection in the event of a breach. In contrast, only your financial interests are protected by data breach insurance.
A data breach insurance policy can offer small business owner s enough protection from data breaches, whereas larger businesses will be better suited for cyber liability insurance which offers more coverage to help prepare for, respond to and recover from the damage that cyberattacks can cause.
It is imperative that small businesses have robust cybersecurity plans in place as well as data breach insurance.
Check out these additional resources to learn more about how we can help safeguard your business with our cybersecurity and data breach protection.
Benefits of Data Breach Insurance
While insurance against data breach won’t actually prevent cyber attacks, it can offer a valuable layer of protection for your business.
1. Reimbursement for Business Loss
A cyber attack can compromise sensitive information as well as interrupt your business operations, resulting in significant revenue loss.
In the event that a cyber attack causes your company to lose income, an effective cyber data breach insurance policy will protect you against these losses as well as the costs associated to get you back up and running.
2. Restores Reputational Damage
Data breach coverage can provide crucial assistance in restoring reputational damage after a security incident.
Depending on the policy, the insurer may cover legal fees required for restoring trust with clients after customer information/personal information has been compromised, PR expenses related to reputation management, as well as measures needed for improving security infrastructure following a breach.
Reputational damage affects every part of an organization’s operation, so having an insurance policy that helps restore lost credibility and reputation is absolutely invaluable.
3. Peace of Mind
Cyber insurance also gives business owne rs like you peace of mind in knowing that your organization is covered if any unexpected damages or need for third-party coverage results from a security breach.
As the average cost of a data breach has risen, this peace of mind is especially valuable in the case that a data breach occurs . The global average cost of a data breach increased 2.6% from $4.24 million in 2021 to $4.35 million in 2022 — the highest it’s been in the history of IBM Security’s “The Cost of a Data Breach Report.”
How Much Does Insurance Against Data Breach Cost?
If you’ve read this far, you now have an answer to the following questions:
- What is data breach insurance ?
- What does data breach insurance cover ?
- What is the importance of data breach insurance ?
But what is the cost of insurance against data breach ?
There are a number of factors that can affect the cost of your data business insurance . In order to calculate your unique this, you will need to consider the following factors:
- Number of customers, clients, and end-users
- Information and type of data you store
- Financial revenue
- Cybersecurity solutions implemented
- History of claims
With data breaches continuously on the rise, powersolution.com helps you mitigate risk. Book a free consultation with us today to learn more about how we can help safeguard your small business !
How is your state of IT? Call Us: (855) 551-7760 with any questions.