Cyber Liability Insurance Cost: Why It’s Worth Your Money

In 2018, the average cost of cyber crime in the United States was $27.37 million.

Unsurprisingly, more businesses across the country have been looking for ways to protect themselves against cyber threats. One such way is by opting for a cyber insurance policy.

But what is cyber liability insurance? Is the cost of cyber liability insurance worth it?

Cyber liability insurance is a kind of insurance that covers your company’s liability in the event of a data breach involving sensitive client information. That information includes account numbers, Social Security numbers, credit card numbers, health records and driver’s licenses.

Cyber insurance is one of the leading types of insurance that every business owner needs. We’ve compiled several reasons to show you why taking this coverage is worth every penny.

1. Cyber Insurance Helps Offset Expenses of A Data Breach

Cyber liability insurance is often referred to as data breach insurance, as the focus of this policy is to protect your company in case of a data breach.

But what is a data breach?

One definition states that it’s an incident involving illegal or unauthorized access, viewing or retrieval of data by an individual, application, or service. This security breach is aimed explicitly at stealing or publishing data to an illegal or unsecured location.

Every company that handles and saves a customer’s personal data definitively needs cyber liability insurance. Because data breaches are unpredictable, they can be difficult for a business to budget for them. Every data breach differs in scope, size and complexity.

One instance of a data breach can prove costly, given the potential fines from multiple regulatory agencies, among other parties. Cyber insurance can help your business meet all unexpected costs, including data analysis, communication and legal settlements.

2. It Covers the Cost of Business Interruption

How do you deal with a disaster that cripples your computer systems, halting your ability to transmit data? Such an event could cause you or a third party that relies on your services to lose revenue as it affects a business’ day-to-day operations.

How?

Well, the time and resources that you usually spend on your normal business operations now go towards rectifying the problem, which might lead to additional losses. Recently, hackers have increasingly specialized in denial of service attacks, blocking a company’s access to specific websites.

Should a sudden interruption occur in your business operations, cyber liability insurance coverage can help you out.

3. You Get Cyber Extortion Defense

Imagine that one day, you try to access vital information from your servers, only to find that it’s been held for ransom. How do you deal with the situation?

Unfortunately, these incidents have been on the rise. One of the most prevalent forms of cyber extortion involves the use of ransomware. Ransomware and other malicious software is designed to take and hold your company’s data until you pay a fee to the hackers.

One way businesses prepare for cyber extortion is by acquiring cyber liability coverage, so it’s easier for them to recapture losses when they become victims of the crime.

4. Cyber Insurance Provides Forensic Support

How do authorities deal with cases of data breaches?

An important step is to investigate the source or cause of the attack. The investigation-related expenses, expert help, and consultation fees can add up to a lot of money. With cyber liability insurance coverage, you can get reimbursed for these expenses.

5. Your Business Gets Legal Support

Following a data breach in your company, you can expect that there’ll be some legal activity. With cybersecurity insurance, you can expect appropriate legal help and advisement.

First, you can expect that there will be privacy lawsuits that claim your business breached the privacy of your clients or staff. It’s highly likely that there will be fines from various regulatory bodies. Claims of breach of contract or negligence may also arise.

Most times, companies who’ve been the victim of a data breach also face media liability claims, including copyright infringement, slander or libel.

6. Cyber Insurance Covers You Where Your General Policy Won’t

Now that your business already has general liability insurance, why does it make sense to take cyber liability insurance?

Aa general liability policy specifically excludes any losses that a business incurs because of the internet. Therefore, cyber liability insurance picks up where your general liability insurance coverage leaves off.

To give yourself cyber liability coverage in as many positions as possible, ensure that your policy covers mobile devices and laptops.

How do you go about getting the most seamless coverage you can? The best way is to integrate your cyber liability with employment liability policy and general policy.

7. Cyber Liability Insurance Cost Is More Affordable Than You Think

If you asked many business owners why they didn’t have cyber liability insurance, a good percentage would say that it’s because they thought it was costly.

Sure, there are policies as high as $30 million. But even businesses that want cyber insurance policies with annual premiums of $2,000 can get them. It all comes down to your specific needs and what you’re prepared to pay.

Compared to most other types of business insurance, cyber liability is a fairly new concept. Therefore, there are many variations among policies and lots of room for you to negotiate.

Pick Your Cyber Liability Insurance Policy Today

As technology becomes indispensable for successful business operations, companies now see the value of a solid cyber liability insurance cover. The risks of modern technology are evident everywhere, and cyber insurance helps address them when other policies simply won’t.

As a business owner, you have the freedom to choose what level of coverage you need based on your operations and range of exposure. The one undeniable fact, however, is that cyber liability insurance cost is well worth it.