Cybersecurity Insurance Gaining Steam

Controlling your organization’s data relies on keeping your network and computing infrastructure free from threats. Early detection allows your business to actively confront risks before they develop into major issues. However, threats are becoming more difficult to detect in early stages, and one hidden threat could doom your entire business. 

While you might think that small businesses are not commonly targeted by cybercriminals, you’d be wrong. Small businesses tend to have less security to bypass or navigate through, meaning they are a much easier target. Data breaches can cost your business hundreds of thousands of dollars, or potentially millions, if that data falls into the hands of a vicious cybercriminal. If your business was forced to pay a million dollars at this exact moment to pay for exposure of sensitive information, could you do it? What would your plan be? Hopefully your solution involves leveraging cybersecurity insurance. While having insurance won’t prevent malware, or keep hackers away, it could be the difference between closing your business’ doors, or not. 

Types of Cybersecurity Insurance

Businesses have two options when it comes to cybersecurity insurance:

• First-party - First-party cybersecurity insurance works to cover the costs associated with being a victim of a data breach. 
• Third-party - Third-party cybersecurity insurance works to cover the costs associated with being blamed for a data breach. 

For most businesses, first-party insurance is a sufficient policy. 

The Standard Policy

Like most insurance policies, no two are identical. Insurers are able to conform policies to your individual business needs. However, the more coverage you opt to receive, the more you will pay in premiums. Insurers configure your business policy based on your company’s industry, data risk, your security practices, your capital position, and several other variables.

Configuring your business policy should not be based on the cost of the premium. It should be based on the needs of your business. Assessing cybersecurity risk is becoming a common practice, and your business should self-evaluate. 

Why Is Risk Assessment Necessary? 

Cybercrime is becoming a huge concern for small and large businesses alike. Cybersecurity insurance protects your company from the unbelievably high cost of data breaches. Talking to our experts at Preferred can determine whether your security practices are sufficient, and procure necessary solutions which will in turn lower premium cost. Give us a call at 708-781-7110 today.