This is a newer very important coverage item for businesses. We are constantly hearing about data breaches on the news. We’ve seen big companies such as Nintendo, Target, GoDaddy, Marriot, Norwegian Cruise Line, LabCorp, Microsoft, Facebook and Home Depot all have compromised data. How do you protect your company and is this coverage worth it?
Cyber insurance generally covers your business’ liability for a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver’s license numbers and health records.
Data breach insurance bundles in with a cyber insurance policy but is a separate line item so you won’t see the same coverage for each unless you choose that option. This coverage helps your business respond to breaches and can offer enough protection for small business owners. Cyber liability insurance is typically meant for larger businesses and offers more coverage to help prepare for, respond to, and recover from cyber attacks.
Cyber insurance policies generally do not cover: Potential future lost profits, Loss of value due to theft of your intellectual property, Betterment: the cost to improve internal technology systems, including any software or security upgrades after a cyber event.
Many experts suggest that businesses purchase at least $1 million in cyber liability insurance. Without this valuable coverage, your company could face insurmountable financial challenges and possible bankruptcy after a cyber breach. On average, small businesses pay from $250-8,000 per year for this valuable coverage.
So, is cyber liability insurance worth it? The short answer is yes; the immediate costs of a data breach are significant, and the latent costs can be devastating. Cyber liability insurance offers several mitigation measures and high limits to cover the costs of a breach.
If you have any questions or concerns please reach out to us. We’re happy to help answer those questions and happy to give you a personalized quote. Most small business owners will definitely be on the low end for an annual premium so don’t think you can’t afford it. It can be quite affordable and the protection it affords if you do business online can be priceless.