5 Key Considerations When Buying Cyber Insurance
By: Jim Feldkamp
In a world where businesses can operate entirely online, cyber insurance coverage is more important than ever before. The past few years are proof that no organization or industry is immune from a cyber attack.
As more companies face cyber attacks, the market for cyber insurance has skyrocketed. Ready to protect your business in today’s ever-evolving threat landscape?
Here are five things to consider when purchasing cyber insurance.
1) Be Proactive
Cyber insurance isn’t cheap, but there are ways for companies to reduce the cost of premiums and deductibles. Companies should analyze their potential exposure to a cyber attack and then create a robust incident response plan (IRP).
Businesses that proactively develop an IRP show that they are committed to protecting their data and hardening their security. In turn, most insurers respond to this lowered risk by lowering costs.
2) Choose Provisions that Benefit Your Company
Because cyber insurance is relatively new, you’ll find that coverage varies. However, as a business owner, there are certain provisions that your policy needs to cover, including:
– Data theft and data loss
– Multimedia liability
– Laptops and other computer hardware
– Claims results from external parties (i.e. your data vendor)
In choosing policy provisions, make sure that you thoroughly understand the nature and extent of the cyber risks that your company faces. This way your policy is tailored to meet those needs.
3) Get Retroactive Coverage
Some cyber insurance policies only cover breaches or losses that occur after the date the policy is enacted. For businesses, this is extremely risky as many breaches go undetected for months, sometimes years.
Without retroactive coverage, you’ll be on the hook for any loss or damage that occurs before the policy inception date.
When choosing cyber insurance, go with the policy that offers the earliest retroactive date. This way you’re covered.
4) Make Note of Exclusions
Like any other type of insurance, cyber policies have all sorts of exclusions. When looking at a policy, make note of the policy exclusions and determine how they limit overall coverage.
Some of the most common exclusions include:
– Outdated software
– Unencrypted data
– Unencrypted mobile devices
– Card issuer fines
– Acts by foreign governments
– Bodily injuries
Depending on the insurance company, you may be able to modify the exclusions so that the policy covers your business’ needs. Be open and honest about the type of cyber coverage you’re looking for.
5) Read the Fine Print
Though painstaking, when it comes to acquiring cyber insurance, it’s important to thoroughly examine the policy. Read through every page and closely review the terms before signing the dotted line.
Make sure that all of the provisions are clear and agreeable. If you have questions or are uncertain, reach out to the provider or appropriate legal counsel to seek clarification.
By reading the fine print, you can have confidence that you are choosing the policy that best matches your company’s risk level.
Summary
Whether you run an ecommerce business or provide marketing services for clients around the globe, don’t think twice about buying cyber insurance. This is the best way to protect your company in the event of a hack, data breach, or any other cyber-attack.
