A 202 data protection survey from Rewind found one in four retailers surveyed have permanently lost critical business data, leading to decreased sales and revenue for their businesses. The most significant causes included human error, cyber attacks, and third-party applications.
To keep business operations running, investing in cyber insurance coverage can help an organization get back on its feet by providing financial protection against data breaches and other forms of data loss. In the event of a ransomware attack, some first-party insurance policies cover investigation costs, lost revenue, and the price of repair for hardware and software for your company.
Data breach insurance typically provides first-party coverages for losses linked to an information breach, hack, or other theft of company information. Insurance policies can cover expenses related to informing customers and other affected parties impacted by the breach, and providing resources such as credit monitoring and assistance hotlines.
Data breach coverage protection is usually limited to protection against first-party costs. Depending on the type of data breach policy you choose to purchase for your company, different breaches may be covered under specific guidelines. Some of these costs can include:
Some coverage exclusions typically include those linked to criminal acts, breaches of contract, property damage, and employment practices:
For these reasons, companies need to be careful review any contracts before signing. This is due to the fact that the terms and coverage provided in cyber-liability insurance policies may vary widely across states and price points.
The price of coverage can vary depending on the financial assistance you require. This depends on the size of our company, annual revenue, and coverage requirements. Typically, this ranges somewhere between $650 to $120,000 annually.
As a general rule, it is better to choose a policy with broad coverages that addresses risk as effectively as possible. During a worst case scenario, being prepared help you can navigate the extensive costs surrounding privacy violations and data breaches.
Overall costs can depend on a variety of factors including:
Buying cyber insurance for your business can give you the peace of mind when it comes to the loss of sensitive data and the financial costs associated with this. By choosing the right policy for your business, you'll be able to file claims in the event of a data breach, which can be worth the initial investment as cybersecurity incidents increase in sophistication and frequency online.
Typically, the data owners, namely the firm or organization that is storing data is responsible for any data breaches that occur and will have to pay any legal fines or fees out of pocket unless they are covered by an insurance policy. Even if the security failures are the fault of a third-party cloud provider, the data owners may be held liable for any customer information that has been lost.
According to a guide on data breaches from the FTC, the first step that businesses should take during a breach is to inform law enforcement, other affected businesses, and affected individuals. In addition, you should contact your insurance company as soon as possible and provide the necessary documentation regarding the information that has been lost during the breach.
What Is the Difference Between Cyber Insurance and Data Breach Insurance?
While cyber liability insurance coversboth monetary losses from a breach and provides legal protection, data breach insurance is only limited to your financial interest. For businesses that store personally identifiable data on their own servers, cyber liability insurance provides broader coverage.
However a business doesn't store data on on their own networks but can still be held responsible for data loss from third parties, would benefit most from data breach insurance.
Although data breach insurance can be a suitable safety net for a business that suffers from a cybersecurity or privacy-related loss, it may not be prudent to rely solely on your insurance plan when an incident occurs. It should be used to support regularly updated security policies and practices in your company.
If you're having trouble deciding on the type of data loss insurance or cyber insurance you should purchase for your business, contact us today at Assured Standard for a comparison of the best options for your brand.