If your business uses data, it should also be using cyber risk insurance to protect that data from the fallouts of a breach.
Cyber insurance is a must for modern businesses, particularly those in data-rich industries like law, healthcare, and finance, as is having a plan of attack for how you respond to breaches if and when they occur. And while you may think that you’re safe from a data breach if you run a small- or medium-sized business, organizations of all sizes are at risk of data disruptions—and all stand to benefit from an investment in cyber risk insurance.
Here’s what to know, including the big benefits of cyber insurance for MSPs and SMBs.
What is Cyber Insurance?
Cyber insurance is a mitigating loss product that protects businesses from many of the high-cost consequences of a data breach. It can’t bring your data back (you’ll need other tools and services for that), but it will cover many liability costs related to the loss of compromised data. Depending on your plan, this may include:
- Legal fees and expenses
- Affected party notifications
- Data recovery
- Cyber attack clean-up of your computer system
Who Needs Cyber Insurance?
There are very few businesses that don’t require the protection of cyber insurance. However, two, in particular, have a lot to gain: MSPs and SMBs.
- MSPs: What are MSPs? MSP stands for Managed Service Provider. These are third-party companies that manage IT infrastructures on behalf of clients and are thus responsible for a significant amount of high-value data.
- SMBs: What are SMBs? SMBs are small- and medium-sized businesses. And despite their size, they are increasingly vulnerable to data losses, with 61% of SMBs reporting a data breach in the past year.
Whether it’s due to human error or a direct attack, loss of data is a major issue with serious financial penalties. Having cyber risk insurance in place can minimize at least some of the associated risks for these and other types of businesses, and could make all the difference in how quickly a company is able to bounce back from a breach.
Benefits of Having Cyber Insurance Coverage
You can’t fully avoid a data breach, but you can protect yourself and your customers in the event that it does occur. Here are some of the ways that cyber insurance can help you do that.
A data breach is a costly affair, especially when you factor in things like affected party notifications and resolutions, system-wide security patches, and potential legal fees. Cyber insurance helps offset these costs, saving businesses a ton of money and allowing them to rebound sooner rather than later.
SMB or Managed Service Provider insurance can also mitigate forensic costs, either by contributing to the hiring fee of an IT security expert or by offering 24/7 data breach forensic support (or sometimes both).
Cyber Extortion Protection
For businesses that face extortion after a malicious cyber-attack, insurance may be able to help a business recoup all or part of the ransom fee. This is an increasingly important benefit as these types of breaches become more common.
Other potential benefits of cyber insurance include reimbursements for loss of business related to the breach and direct legal support.
Invest in Cyber Insurance and Keep Your Business Safe
At this stage in the game, the question is really can your business afford not to have cyber insurance, rather than can it find room for it in the budget. Fortunately, plans are customizable, meaning you can pick and choose the benefits you pay for. And the more comprehensive your plan, the less you have to lose from a data breach. So invest in cyber risk insurance and protect your data, your customers, and your business from the risks associated with a cyber-attack.
Want to know more? Contact us today for additional guidance, as well as for information on our legal IT services.
Leave a Comment
You must be logged in to post a comment.