Cybercriminals are becoming more sophisticated by the day. Orange County managed IT services experts recommend cybersecurity insurance as an essential risk management tool for your company. This insurance is designed to mitigate losses caused by a data breach, network damage, or other system interruptions such as hackings that slow down systems or cause revenue loss.
Investing in cybersecurity protection systems is a great way to minimize the possibilities of being hit by a cyberattack, and purchasing cyber-liability insurance can help you mitigate losses by providing funds to restore operations following a breach.
Why Businesses Shouldn’t Ignore Cybersecurity Insurance
Surprisingly, many organizations aren’t purchasing cybersecurity insurance. According to statistics by Insurance Journal, 50 percent of companies don’t have cyber-liability insurance and 27 percent are not planning to purchase it. Regardless of the figures, the insurance market is projected to grow from $2.5 billion in 2015 to $7.5 billion by 2020.
Cybersecurity insurance policies vary widely and can be confusing for business owners. This type of insurance should be used to supplement your already existing preventive measures. More often, insurance companies will carry out a comprehensive risk assessment, either in-house or through a third-party contractor. It’s a great way to highlight vulnerabilities and risk areas that need attention.
How to Choose the Right Cybersecurity Policy
When shopping for an insurance policy, the annual cost is a key concern. Orange County managed IT services experts advise that you should complete a cost-risk analysis to determine whether your asset value outweighs premium costs. Other questions that could help you figure out the right policy include:
- How many sensitive records have you stored?
- What types of records have you stored?
- Where are they stored (cloud, in-house servers, etc)?
- What would it take to safeguard your customers’ sensitive information?
- How long would it take to restore operations?
- Do you store data on mobile devices, websites, remote services, etc?
Cybersecurity policy prices vary widely depending on the type of business, liability limits, annual revenue, level of preparedness, etc. Small companies can expect to pay anything between $750 and $8,000 annually. Mid-sized and large organizations can pay much higher.
Types of Cybersecurity Insurance Policies
There are two types of policies to choose from:
- First-party insurance – Caters to losses suffered by your organization. If a system is compromised and data is exposed, this coverage pays the cost to remediate the situation. It’s meant to prioritize business data protection, and targeted information includes credit card numbers, email addresses, phone numbers, social security numbers, and medical information.
- Third-party insurance – Caters to expenses related to customer data that your business fails to protect. It can as well pay legal expenses if someone sues your business for exposing their sensitive personal information.
To lower your cybersecurity premiums, you should enforce proactive approaches towards better security. User awareness training is a great way to enhance security and save money. However, it’s important to note that cybersecurity insurance is not a substitute for protection measures but a backup plan to remedy losses whenever hackers manage to get past your protection mechanisms. If you have any questions about cybersecurity matters, contact us at Advanced Networks. Our Orange County managed IT services experts are ready to answer any IT-related questions you have!