Cyber Insurance and Essential Factors to Consider in a Policy

Cyber-attacks are a constant threat when your business gathers or stores information online. Even though you might follow all of the best cyber security practices to protect your business and your customers’ data, you can’t always prevent every threat, and that’s where cyber insurance comes in.

What Is Cyber Insurance?

Since most general business liability policies exclude cybersecurity attacks, you need to purchase specific cyber insurance to protect your business. Cyber insurance is a commercial insurance policy that helps cover the expenses your business could face if you become victim of a cyber attack. Those expenses might include legal fees, the cost of notifying customers of a data breach, the cost of restoring or replacing the data that has been stolen, and any income your business could lose until you’re able to get up and running again.

Types of Cyber Insurance

Privacy liability coverage helps protect your business if a data breach exposes private data, protecting you from potential liability costs.
Network security coverage helps pay for costs related to network security failures, like data breaches and cyber extortion demands.
Network business interruption insurance helps cover losses that your business could face resulting from cyber risks, such as if your business isn’t able to operate because of a third-party hack.
Errors and omissions coverage helps protect your business if a cyber attack means that you can’t fulfill the services you’ve agreed to provide to a client.
Media liability coverage helps protect your business against intellectual property infringement, such as through online advertising or social media posts that your business creates.

How to Choose a Cyber Insurance Policy

With so many insurance options available, it’s important to choose the right policy for your needs. This cyber insurance coverage checklist can help you evaluate your options:

Evaluate your business’ level of risk, such as whether you store sensitive data
Determine which risks you want coverage for, such as errors and omissions or network security coverage
Consider the potential financial risks of an attack to determine how much coverage you need
Research your insurance options and get and compare quotes

Who Needs Cyber Insurance?

Cyber insurance is important for any business, especially if your general business liability policy excludes cyber attacks. Even though you may take steps to maximize your business’ cyber safety, an attack is still always possible, and can have widespread and significant financial consequences. While any business can benefit from cyber insurance, if your business stores private data, like customer personal information and credit card details, it’s particularly critical to purchase insurance. Insurance is a worthwhile investment in protecting your business.

You can get free cyber insurance quotes online today to start exploring available plans for your business. As you compare the quotes, focus not only on how the premiums stack up, but also make sure that you’re choosing plans that offer the coverage limitations your business needs.

Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.