What is Cyber Insurance and Why Do You Need It?

One of the biggest threats facing the modern business is that of attacks against computer networks and the data stored in-house or in the cloud. Unfortunately, many businesses are not adequately prepared to defend against these types of attacks. In addition to that, there are many businesses that do not have the resources to properly respond to attacks or to manage the type of damage that can occur in the aftermath.

As a small business owner, you might think that your standard business insurance has you covered for such an event, but this is often not true. If you are worried about the potential losses that can come from these types of attacks, then you need to look into cyber insurance. Learn about cyber insurance and why it is needed.

What is Cyber Insurance?

Cyber insurance is a type of policy that is intended to protect businesses from the many financial risks that can come from using modern information technology. That may sound simple, but this coverage extends to a broad range of possibilities. It could be anything from a data thief on the other side of the world to a misplaced mobile device with sensitive information on it.

With cyber insurance, you can have coverage that will protect against property loss that is associated with an attack, and it can also help to cover the liabilities that come with an attack. Furthermore, it can protect against the loss or theft of data, attacks from hackers, attacks related to negligent or malicious insiders, systems that are rendered inoperable as the result of an attack and more.

Why Cyber Insurance is Important

Even with the best security practices, these types of attacks are always a possibility. Successful attacks have occurred against some of the largest corporations, and they dedicate a sizable budget to information security.

When these attacks occur, the costs that come with them can be staggering. You might be liable for the costs of fraud associated with information that has been lost, you might have to cover the cost of things like credit card reissuance and credit monitoring for those that have been affected, there could be costs associated with fines, a legal defense, and more.

As a business owner, you are responsible for what happens on your network and the information that you retain. The above-mentioned costs are just a small portion of what you may have to pay in the event of an attack, and when all is said and done, the total cost of one of these events can easily run into the hundreds of thousands of dollars.

By getting cyber insurance, you are protecting your business against these costs. It can pay for things like the notification of people affected by the attack, legal fees, fines, the replacement of equipment, and more. For smaller businesses, having coverage could be the difference between surviving the attack and falling into bankruptcy.

Where to Get it

If your business is at risk for these types of events, then you need to contact your agent to ask about cyber insurance. Most insurance companies have started offering this type of coverage for businesses of all sizes. The important point to note is that most policies for general liability and property do not cover cyber attacks, so it is important to make sure that you are getting the additional coverage that you need.

Harry Kelleher & Co. has been serving the insurance needs of businesses in the Greater New Orleans area for more than 30 years. If your business is exposed to the potential for online crime or the loss of data, we can find you a policy for cyber insurance that is fitted to the needs of your organization. Contact our offices to learn more about your options for cyber insurance.