5 Reasons Why You should have Cyber Insurance

Posted on: Apr 1, 2022 | 3 mins | Written by: HDFC ERGO Team

5 Reasons Why You should have Cyber Insurance

When it comes to new threats and vulnerabilities, cyber-attacks are the big kahuna. But these days it seems like nobody is immune to cyber-attacks. A data breach can cause a flood of problems: False information can harm you or your business; you could lose sensitive information, or even worse, you run the risk of losing consumer trust if you are running a business. And then there are the legal and compliance issues that are brought on by this situation. At this point, it's probably becoming crystal clear why having cyber insurance can help protect your company against many of these potential woes.

This article will provide 5 reasons why you need to get cyber insurance

1. Cyber insurance plans are less expensive than you are assuming:

Nobody wants to spend cash unless they really have to. And if you're the owner of a small business, you probably think cyber insurance is something you can do without. But with the growing number of cyber-attacks every year, cyber insurance policies are becoming more of a necessity than a luxury.

And if you think they're pricey, you're mistaken. There are cyber insurance plans with annual rates of as little as $1,500 , however, they can go higher. Depending on your demands and what you're prepared to spend, you can acquire coverage up to 1 million USD and deductibles as little as $10,000 in that price range. Because cyber insurance is a relatively new idea, there is a great deal of diversity across plans, as well as a great deal of space for negotiation.

2. Cyber insurance plans have more coverage than you are assuming:

Many cyber insurance plans provide "first party" insurance coverage, which means they will reimburse you for issues like business disruption, the cost of alerting consumers of a cyber-breach, as well as the expense of engaging a public relations agency to restore any image harm caused by a cyber-assault. Having this money on hand in the case of a severe hack helps keep the power on until you can restart regular cash flow. A solid cyber insurance policy will even include any regulatory fines and penalties incurred as a result of an online data breach.

This is exceptionally important for smaller companies. If a bigger company's one stream of operation is shut down due to a cyber-attack, it can rely on revenue from its other branches. A smaller corporation may just have one business line. So, they need that extra coverage.

3. You most likely do not have any risk management group:

Large organisations have whole departments dedicated to researching potential risks and assisting in the development of policies and processes to mitigate them. You probably don't, but a decent insurance company may serve a comparable purpose. There are a few ways cyber insurance can help cover the gap. Many insurance providers collaborate with small businesses to ensure that an online firewall is in effect to safeguard your network. They can even provide you with risk-reducing social media policies. It might sound unbelievable but major insurance providers are prepared to assist you in these aspects. This is mainly because the more safeguarded you are from cyber-attacks, the less probable it is that you will experience a breach that would lead to a claim filed.

4. You most likely save your valuable data on cloud storage:

Is your website or any data it contains, hosted or saved on a cloud platform? Now, even if your private data is stolen from that platform, you remain legally liable to your customers.

You don't have complete control over how your cloud provider manages your data, but cyber insurance coverage can safeguard you in case your cloud service provider makes a mistake.

5. Your general liability coverage does not include online losses:

Usually, general liability coverage expressly excludes losses caused by the Internet. As a result, comprehensive cyber insurance coverage can fill in the gaps left by your general insurance policy.

To ensure that you are covered in as many instances as possible, you need to make sure that your cyber insurance policy includes laptops as well as mobile devices. This will guarantee you seamless insurance coverage.

Conclusion

It's time to understand just how essential cyber insurance is to the security of you and your business. While we can certainly warn you again and again about not getting sloppy with data, there’s no better insurance policy than actually having protection in place. Cautious preparation has never hurt anyone—it's one way to potentially keep yourself from being on the receiving end of an expensive data breach.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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