Determining the Right Coverage for Your Cyber Insurance

Posted on: Nov 17, 2023 | 3 mins | Written by: None

Determining the Right Coverage for Your Cyber Insurance

"How much cyber insurance do I need?" If this question occupies you, it may not be simple to answer. Why? Because different people may require distinct solutions. Multiple factors impact the total premium your business must gain. This article will help you understand the complete cyber coverage needed for your business.

Assessing Your Cyber Risk Profile

An insurer can determine your risk profile by understanding your business type. However, different businesses are getting exposed to unique risks daily. Most corporations that store vulnerable and crucial personal data of employees or clients, like DOB, credit card details, names, etc., can become a target of cybercriminals. And if your business ever suffers an attack, it can suffer a tremendous financial loss.

However, businesses with only emails and names may not suffer significant losses and can pay a lower premium. Hence, by calculating your risk profile, the provider will recommend a policy limit.

Factors Influencing Coverage Amount

The coverage cost of your cyber insurance will depend on various factors, some of these include:

1. Industry and Size:

As you already know, business size impacts the risk of cyberattacks and affects the premium costs. Additionally, industry type also influences the coverage amounts. Healthcare, finance, government, etc., are some high-risk sectors.

2. Data Sensitivity and Scale:

Companies with limited clients pays smaller amount compared to a big company with massive client details that is extremely sensitive.

3. Revenue:

Greater annual income causes a higher risk of attracting cybercriminals and expensive insurance. Hence, when wondering "how much cyber insurance do I need," you must consider this factor.

Determining Your Ideal Coverage

The business's security exposure and stored data will determine the insurance coverage you require. Those with experience with insurance may calculate risks. However, you must prevent paying an extra amount or having insufficient cyber insurance coverage.

Several small companies limit their coverage to $1 million, which can cover average exposure to risks. For companies with higher risk than average, you must consult insurance experts to assess the ideal coverage. Insurance brokers working with such companies offer the best assistance in selecting an appropriate policy limit.

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

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