Although cybersecurity criminals have existed since the early days of the internet, the kinds of threats they pose to businesses have changed a lot over time. In the past, you might have to worry about hackers getting into your system and gaining access to confidential data, but today, companies lose millions of dollars per year over ransomware attacks, which hold their data hostage for large sums of untraceable cryptocurrency while sabotaging their operations.
In a world where the cybersecurity threats are so dangerous, and where protecting sensitive data is more important than ever before, many businesses are turning to cybersecurity insurance to help them manage their risks and protect their bottom line. But, like any kind of insurance, understanding what you’re getting and how it will help your business isn’t always obvious.
So, what is cybersecurity insurance, and how can it help your business?
What is Cybersecurity Insurance?
Cybersecurity insurance, also known as cyber liability insurance or data breach insurance, is a type of coverage that protects businesses from the losses and damages associated with breaches. Since most ransomware attacks cost companies over $250,000 per incident, having cybersecurity insurance provides many companies with a crucial safety net in the event that hackers get into the system.
Aside from legal fees and other expenses directly associated with a breach, cybersecurity insurance can help you with the process of notifying stakeholders of a breach, restoring the personal identities of affected customers, recovering compromised or damaged files, replacing hardware affected by the breach, and even things like free credit monitoring for customers whose data was stolen.
Why Get Cybersecurity Insurance?
Everything associated with remediating a breach can cost you a lot of money if you’re paying out of pocket, and in a worst-case scenario, could shutter your company. This is why cybersecurity insurance is so important, especially if your organization deals with sensitive client data and stands to lose a lot if that data gets stolen. It may also be the case that you work in an industry, or even work with a client in an industry, that operates under legislation like HIPAA, which means that this kind of insurance may even be mandatory.
Since hackers have become so sophisticated, and their methods of extortion so devastating and scalable, relying on your firewall and your employees not accidentally clicking on the wrong link is no longer an adequate cybersecurity posture. Your business needs to be prepared for all kinds and levels of risk, and have a plan in place for even the worst-case scenarios. Even the process of getting cybersecurity insurance can do wonders for your cybersecurity programs, as the rigor and oversight involved help shine a light on your vulnerabilities and their potential fixes.
Aside from the financial damages associated with a breach, there’s also the reputational problems to consider. If you don’t have a safety net for when your systems get hacked, you’ll be left scrambling to find solutions that will satisfy your stakeholders, probably paying out of pocket for expensive last-minute solutions and revealing to everyone that you didn’t have your bases covered. The last thing that clients need to worry about when signing contracts with you is whether your business is a risk to their operations, which means even just having cybersecurity insurance allows you to do business more confidently.
How do I get Cybersecurity Insurance?
The first step in obtaining any kind of insurance, including cybersecurity insurance, is a risk analysis. In order to know what you need from your coverage policy, you need to know the kinds of risks you are already facing, the risks you might face in the future as a result of infrastructure changes, and also the level of tolerance your business has for cybersecurity threats. There may be some parts of your network that are critical to protect, while other parts don’t pose a threat to your operations. Knowing these risks, as well as developing a plan to managing them, will support a better security posture while preparing you for the insurance process.
After developing an understanding of your risks and your needs, your business is in a good position to speak to different insurance providers about their offerings. It’s important to remember that not all insurance providers are equal, and the differences in their coverage policies might be significant. For this reason, we recommend getting quotes from multiple providers so you can see the different kinds of benefits available. We also recommend that you involve legal counsel to get a second opinion on the fine print, or to [contact us] for support through the process.
Particularly with cybersecurity insurance, businesses need to think beyond the balance sheet and consider what they are getting and how they can deploy it. The reputational damages and time loss associated with breaches don’t often get recorded explicitly in the financial books, which means your leadership team may have to do some scenario planning to put numbers to different situations and courses of action. This will help you understand the kinds of value that cybersecurity insurance policies can offer your business, and put you in a good position to negotiate for the best coverage.
The Importance of Being Prepared
One of the biggest issues with cybersecurity attacks is how unpredictable they are. Much like an unexpected car accident or house fire can wipe away someone’s entire life in an instant, a tired employee interacting with the wrong email could lead to your entire network being held for ransom. The enormous downside risks involved with data security means that cybersecurity insurance is quickly becoming a necessary tool in the ongoing fight against digital crime.
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Working with Kalmer Solutions
Kalmer Solutions provides managed IT services for the modern workforce. Based in Jonesboro, Arkansas, we support our clients with virtual CIO services, technology upgrades, cloud-based computing, IT support, cybersecurity, the fulfillment of compliance requirements, and more. Our goal is to become your trusted IT partner and add long-term strategic value. Contact us today to learn more about how working with us can transform your business.