If your company’s office caught on fire, or was damaged by a storm, the chances are high that your insurance coverage would help you cover the costs associated with such damage and put you back on the path to recovery.
But, what about a different type of disaster — one that is happening more and more to businesses of all kinds throughout the country?
Breaches in a business’ IT infrastructure and computer network can have a similar, devastating effect on a company, but traditional insurance does not cover the financial fallout whatsoever. This is likely a large part of the reason that most small businesses end up shutting down permanently on the heels of a significant data breach — they’re simply not equipped to handle the fallout from such occurrences.
This is something that can happen at your business, too, no matter how small your company might be. Research shows that almost half of businesses suffer from some sort of breach, many of which have been victim of multiple breaches.
With this being such a primary concern in today’s tech-centered age, there is a new tool that you can use to protect yourself.
About cyber insurance
In general terms, cyber insurance is exactly what it sounds like — an insurance policy that covers IT breaches and tech disasters. The fallout from a data breach is very broad. You could be facing fines amongst a wide range of other expenses that come with trying to restore data and repair your network.
Not only that, but a data breach is a PR nightmare for a business, greatly diminishing a company's reputation in the eyes of their clients, or potential clients. Cyber insurance helps cover these expenses so that they do no automatically drown your business.
A typical cyber insurance policy can go to cover expenses associated with:
- Notifying those who were affected by the breach
- Legal fees
- Repairing damaged systems
- Data recovery
- Forensic investigation into source of the breach
- And more
In a major breach, this can be a significant amount of money that your business will not be on the hook for.
Cyber insurance should be a safety net, NOT your only line of defense
Many businesses would benefit from cyber insurance, but even if you have it, you still want to do everything in your power to avoid using it.
That means having effective data protection in place, in addition to a comprehensive and robust disaster recovery plan for the event of a breach. With these components in place, even if you are the victim of a breach, you will be well prepared and able to minimize the fallout.