The Basics of Cyber Insurance
Cyber attacks get more sophisticated by the moment. That’s why robust cybersecurity protection is so important. But if preventative measures fail, a costly attack could occur. Can Cyber Insurance help a business recover? It can, if you have the correct coverage.
What Coverage Should You Look For?
So, what should a Cyber Insurance policy cover? According to the Federal Trade Commission, you should ensure your policy includes coverage for data breaches, cyber attacks on your data held by third parties, network breaches, and cyber attacks that occur worldwide, not just within the United States.
Make Sure Your Insurer Has a Product To Offer the Best Protection
Question your insurer to see if they provide defense if you are subject to a lawsuit or a regulatory investigation—look for “duty to defend” wording within the policy. You’ll also want to ensure you will be covered for excesses if another policy is applicable. Ask if there is a breach hotline available 365 days a year, 24/7, so you have expert assistance when you most need it.
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The type of coverage is important, too. There are two basic types: First-Party and Third-Party. First-party coverage will generally protect you from liability if a third party brings a claim against you for their losses. This coverage should include:
- Costs of legal counsel to determine notification and regulatory obligations
- The recovery and replacement of lost data
- Services for customer notification of a breach
- Coverage of lost income due to business interruption
- Crisis management and public relations assistance
- Costs associated with cyber extortion and fraud, fees, fines, and penalties related to the incident
- Costs of services to investigate the breach
Third-Party coverage will protect you and your business from liability if a claim is brought against you by a third party. Third-Party coverage should include:
- Payments to those customers impacted by a breach
- Expenses relating to claims and settlements from a dispute or lawsuit
- Defamation damages due to copyright or trademark infringement
- Litigation costs, settlements, damages, and judgments brought against you
- Accounting costs
The Next Step
The bottom line is this: you must consider how much of a risk a cyber attack is for not just your business, but the clients you serve. Talk to your insurer about your Cyber Insurance needs. If they don’t offer a product, ask if they can refer you to a program. Most importantly, stay vigilant and prevent cyber attacks before they start. Contact Lasco using the form above for more information.