No matter how careful you are or how reputable your security software is, your business is always at risk for a data breach. If it happens to your company, you must work to alert affected customers or employees and mitigate any fallout. To protect your company from the potential of this disaster, you may want to consider purchasing cyber insurance.

What is Cyber Insurance?

If you have business insurance in Salt Lake City, Utah, you may think you’re covered for any event. Most of the time, your policy will include business liability coverage. However, it may not cover liability from a security breach.

Also known as cyber risk insurance, cyber insurance protects your business if there is a security breach either online through hackers or in person by entry to a physical location where sensitive information is compromised. Data loss is covered, but that’s not the only coverage you receive. You may also have business interruption coverage and protection from computer fraud or the loss which occurs from transferred funds.

What It Covers

This type of insurance policy will pay for several costs your business will incur as a result of the data breach. Some of these covered costs include the following:

  • Civil damages – lawsuits against the company from affected parties
  • Notification costs – the cost to determine potential victims and to notify them of the incident
  • Credit monitoring – the company will need to pay for credit monitoring for all of those affected by the breach
  • Computer forensics – this process includes hiring professionals who can determine if a breach occurred, to determine the scope and to contain and prevent any further issues. The cause of the breach will also be investigated.
  • The Cost

    When considering cyber insurance for your business insurance coverage, you’ll want to think about the costs involved in a data breach and not just the cost of the insurance. Damages resulting from a data breach can be in the millions and hundreds of millions of dollars, even for small companies.

    Without adequate coverage, a small company will usually go out of business. They cannot sustain these costs and still continue to handle the regular operating costs. The need for this type of insurance is undeniable for any company that does business online or even those that use modern technology to store or handle sensitive data.

    The costs of cyber insurance can vary widely. The level of risk is a big factor for how much you’ll pay as well as the coverage amount you need. You can shop around and compare prices to find a policy which fits your budget. However, cost should not be your only concern. You’ll want to compare policies to see what is covered and what limits or exclusions apply.

    With the continued growth of modern technology, the need for businesses to protect themselves from data breaches will grow. It’s important that every business owner figure out what coverage they need and how to protect themselves and their customers for these unfortunate incidents.