Why You Need Cyber Liability Insurance
According to NSA, more than 80% of cyber attacks are avoidable as long as companies follow the standard practices. Just like the basic measures to reduce the risk of COVID-19 spread became important, cyber hygiene has become the best way to avoid data breaches or loss.
In 2021, it seems ransom attacks have become out of control and up-to-date defense strategy is the key to secure valuable data. Whether you run a small business or a large corporation, it takes continuous effort to protect business assets. And this is where cyber liability insurance comes into the spotlight.
What Exactly Is Cyber Liability Insurance
Often, cyber liability is not a part of your current liability policies. Cyber liability insurance, or cyber risk insurance, will cover an organization’s overall liability due to a data breach and loss of sensitive information. Your cyber liability insurance covers computer repair damages, legal fees, and other expenses, restoring identities, and notifying official regulatory authorities about the cyber attack.
When the Unexpected Happens
When businesses are hit by ransomware, it becomes clear in no time that they have to deal with a tarnished reputation, downtime, cover legal costs, possible regulatory fines, and make ransomware payments. But coverage from cyber liability insurance helps you avoid these costs.
On top of all, your cyber liability insurance triggers an incident response that includes a thorough investigation to speed up the data recovery process. When it comes to cyber liability insurance, you should purchase policies for your business and as well as for your third-party customers.
Why Organizations Must Get Cyber Liability Insurance?
According to an extensive data breach research report, the average data breach accounts for $4.24 million in losses. These costs can include continuity costs, remediation, fees, and lost business. Often, the costs are high enough to put an end to a business. With cyber risk insurance, organizations don’t need to incur these costs.
A survey from Microsoft and Mash highlights that more organizations are purchasing cyber liability insurance than ever to avoid potential data loss costs. In fact, almost 50% of businesses now have cyber risk insurance and feel confident about their policies to cover costs in case of a cyber attack.
Since ransomware attacks continue to increase at an alarming rate, more businesses now want to invest in cyber liability insurance. It is, however, still startling that half of the businesses in the US don’t have any type of cyber risk insurance. At some point, your organization needs to make sure that your current policies should cover a potential cyber event and invest in cyber liability insurance.
Make Cyber Risk Insurance Part of Your Risk Mitigation Strategy
In the end, you have to view cyber liability insurance as part of your cyber risk mitigation strategy. Most businesses feel unprepared when a cyberattack strikes. Ideally, organizations should roll out a cyber risk management strategy.
The program would help the company prevent data breaches, recover the data from a potential breach, and keep an eye on the organization’s risk. It would be fair to state that cyber liability insurance is essential for small, medium, and large organizations.
Cyber liability insurance helps businesses recover losses, take care of damages and fees, and continue to maintain business operations at full capacity. In retrospect, cyber risk insurance allows organizations a chance to repair and rebuild their networks and systems.
In the tech-driven and uncertain financial world, it is a matter of “when” to get cyber liability insurance. Despite your business size and nature of operations, you want to protect sensitive data from the wrath of hackers.
Cyber liability insurance is applicable whether you store your data in the cloud or physical servers. Whenever there is a data storage protocol, there is bound to be vulnerability, and cyber liability insurance kicks in when there is an information loss.
Prescient understands the necessity to get cyber liability insurance coverage in 2021. If you want to learn more information about cyber liability insurance and how it may work for your business, reach out to us and we will help you evaluate your risks.