Cyber liability insurance coverage provides protection against internet-based risks such as the breach of sensitive data. This information includes, but is not limited to, credit card details, social security numbers, and other client/customer information. Unlike data breach insurance, cyber liability insurance provides both legal protection and coverage of monetary losses.
Ideally, companies need enough cyber insurance to cover all potential losses and damages if their clients’ information gets compromised. Research indicates that most companies lose an average of $242 per breached record. That means if you store 10,000 different documents and records, you’ll have to get insured for around $2.5 million dollars.
One of the first things you might notice when getting cyber insurance is the high premiums. In fact, surveys show that the average business owner shells out about $1,500 annually per every $1 million worth of coverage.
This is not an expense most startups would be happy paying. However, the higher premiums are understandable and fair considering the wide coverage of a cyber insurance policy:
Having the necessary funds to get a supercomputer to restore lost data efficiently would make things a lot easier for your party. After all, the primary goal should be to resolve the breach as quickly as possible.
Money shouldn’t be a hindrance to hiring excellent lawyers. You’d want the best legal professionals in your industry representing your party during these types of cases.
Note: Small-time attorneys charge around $50 per hour. Meanwhile, consulting with tenured, reputable professionals would set you back by hundreds to thousands of dollars.
One of the most costly yet overlooked dangers of a data breach is public relations management. Hackers can be caught, data can be restored, financial losses can be earned back, but the trust of your consumers is not something you can easily recover.
One bad mistake is all it takes to ruin a brand. That’s why you need to go above and beyond with your post-crisis management and reputation damage control.
Should you get cyber liability insurance? If you store sensitive customer information and data, then the answer is a hard yes. In general, business insurance is a necessity not just for legal purposes, but for the well-being of your business as a whole.
The premiums will cost you a pretty penny at first, but the legal and monetary protection you get in the event of an internet-based crisis is priceless. The goal of insurance is to help your business endure the toughest of times through long-term continuity solutions.
Interested in taking your understanding of cyber risk further? Explore our comprehensive Guide to Cyber Risk Management to discover strategies and insights that can complement your approach to selecting the right cyber insurance coverage.
Navigating the complex world of cyber insurance can be overwhelming. To simplify your search for the right coverage, explore our comprehensive blog post detailing the best companies to get cyber insurance from. It's designed to guide you in choosing the best provider to fit your unique needs and budget.
Struggling to find the right cyber liability insurance policy for your company? Assured Standard has multiple resources on the top insurance providers in the country. Reach out to the Assured Standard team today to get a customized list of recommendations.
Marie Brown is an insurance underwriter. She completed her Economics degree at the Massachusetts Institute of Technology. With her expertise and dedication, she ensures her clients’ insurance applications are approved.