Do You Need Cybersecurity Insurance?

Today, keeping your network and computing infrastructure free from threats is the best way to control the security of your organization’s data. Any business that actively confronts their risks realizes early on that cybercrime has become a major problem that their business has to be kept insulated from. Unfortunately for many organizations, no matter how much your business spends on network security, all it takes is one misstep by someone who has access to your organization’s sensitive information to cause a major problem.

There are various figures for what data breaches can cost companies. They range from a few hundred dollars to billions of dollars, but regardless how big your business is, or how costly a data breach would be for your company, those costs aren’t going down anytime soon. If your organization's decision makers want to avoid all the negative circumstances that getting hacked can bring to your company’s door, they should consider further protection. One strategy is to use a financial tool: cybersecurity insurance. While it may not actively work to keep malware, hackers, and data theft from being problems for your business, it will work to pay some of the cost of an organizational data breach. 

The Two Types of Cybersecurity Insurance

There are two types of cybersecurity insurance. They are:

• First-party - First-party cybersecurity insurance works to cover the costs associated with being a victim of a data breach. 
• Third-party - Third-party cybersecurity insurance works to cover the costs associated with being blamed for a data breach. 

For the typical business who is considering taking out a policy, first-party insurance should be enough. 

The Standard Policy

Most cybersecurity insurers will point out immediately that no two policies will be the same. The more coverage you are going to want, the more you are going to pay in premiums. Insurers factor in all types of information including your company’s industry, data risk, your security practices, your capital position, and several other variables. 

Since policies are created a la carte, it’s smart to consider your company’s needs and not so much the cost of the corresponding insurance that you are probably going to be paying a little too much for anyway. While assessing cybersecurity risk is becoming more and more common, it is still in its relative infancy and for insurers, when they can’t properly quantify risk, it’s a non-starter as their whole business model revolves around risk assessment. 

Why It Is Important?

It goes without saying that cybercrime is more prevalent today than ever before. By making a push to purchase cybersecurity insurance, you are protecting your company from the runaway costs that a data breach can dump on it. 

If you want to talk about whether or not cyber security insurance is right for your business, and what vendors have products that will fit your business’ needs, call the IT experts at BEI today at (844) BIZ-EDGE.