Are you insured if something happens to your data?
As the number of data breaches continues to increase each year, organizations are beginning to more seriously analyze their risk management policies. One of the areas that is quickly becoming more important for businesses of all sizes is cyber insurance.
Cyber insurance is meant to protect your business from internet-based risks like data breaches, but the details of most policies are anything but simple. When you’re shopping for cyber insurance, these are the key things you need to know:
1. Cyber insurance isn’t covered by most insurance policies
Cyber insurance is not covered under your general errors and omissions or your umbrella policies. It can also vary significantly from company to company since this is a specialty product that is relatively new to the insurance market.
2. Always read your policy
As is the case with all types of insurance, the importance of your policy is in the details. Every security professional should be sure to ask for a copy of their cyber insurance policy and read it thoroughly.
Cyber insurance covers your company for certain circumstances and not for others. Therefore it’s incredibly important to understand what your policy covers so you’ll be prepared should you experience a data breach.
3. Exclusions may apply
As mentioned above, cyber insurance varies greatly by insurance company. These policies often have lengthy terms and conditions and are particular about what is covered and what isn’t.
For instance, policies may not cover the loss of unencrypted data, identity monitoring, data restoration services and data sent that is lost by third parties.
Make sure that you’re completely clear about what types of breaches are covered so that you won’t be surprised when the time comes to actually use your insurance.
4. The difference between first party and third party risk
Another important element of cyber insurance involves understanding the difference between first and third party risks. First party risks include direct costs that are due to loss or damages caused by a data breach. Third party risks involve liability to outside clients, as well as government and regulatory entities. When shopping for cyber insurance, make sure you understand whether your policy covers first or third party risks or both.
5. Strong security policies are still incredibly important
Cyber insurance policies should be seen as a supplement to strong information security and oversight. Many times insurance providers will offer heavily discounted rates for companies that have robust security procedures in place. Many insurance companies will only provide a policy if the client has met their minimum required security practices.
Is your business adequately protected?
Do you have cyber insurance to protect your company and potentially your clients from a data breach? If not, it may be time to talk with a licensed insurance agent about your options. At Avante Insurance we can walk you through the often complicated minefield of cyber insurance. Feel free to give our team a call today at 305-648-7070.