Cyberattacks have become common news in the world of business and don’t discriminate between small businesses and large corporations. In fact, according to Travelers Insurance Company’s head of cyber, 62 percent of all cyber claims are from companies considered small to mid-sized. And while all businesses should have a general awareness about this rising issue, it’s the smaller operations that need to be on the lookout.
One way that small, medium, or large businesses alike can keep the damage of cyberattacks low, mitigating risks from the start, is through business cyber insurance. This type of coverage can help businesses respond effectively to a cyber breach, cover damage costs, and move on with better knowledge, understanding, and protection from future attacks.
Who Can Benefit from Business Cyber Insurance?
Business cyber insurance can help companies of any size respond in the event of a data breach or other cyberattack. If a company’s network or computer systems are hacked or corrupted by a virus, cyber liability insurance can be helpful in many ways. Usually, general liability policies will contain a basic cyber liability portion. However, businesses that store certain information, such as personally identifiable information for customers or employees, should have business cyber insurance that is more nuanced.
Customer and employee data that needs more attention on security can include anything related to identifying a particular individual, such as names, date of birth, social security number, credit card information, or bank account information. The main way a business can protect itself from cyberattacks is with strong internal data safeguards, such as limiting access to personal information to a certain number of people in the company. Also, strong passwords on electronic devices are in order to access different software.
Different Types of Business Cyber Insurance
Most insurers offer two types of business cyber insurance within a cyber liability policy.
- First-Party: This coverage pays for immediate expenses that a business incurs after a data breach or other cyberattack. This can include business interruption costs and missed income, cost of notifying employees, repairing damaged software, protecting the company’s reputation through public relations responses, and extortion money.
- Third-Party: This coverage can help a business defend against lawsuits and legal claims that it incurs following a breach. This includes privacy lawsuits, fines from regulatory bodies, media liability claims, and breach of contract or negligence.
Some insurance companies also provide risk mitigation options to help their clients identify and avoid future cyberattacks before they happen.
What’s Not Covered by Business Cyber Insurance?
There are some exclusions that apply to business cyber insurance policies, so it’s important to understand what is covered and what isn’t in order to plan accordingly. Cyber liability insurance exclusions can include bodily injury or property damage claims, loss of property, such as a phone or computer, criminal activity and social engineering.
When a company purchases business cyber insurance, they agree to keep up with certain security measures in order to keep cyberattacks at bay. If companies fail to maintain these measures, then coverage can be denied.
About American Team Managers Insurance Services
Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (877) 671-7503 to speak to a representative.