As technology continues to evolve, the types of cyber risks, cyber attacks and data breaches continue to grow.
These threats pose a real challenge to businesses of all sizes, as they can result in devastating financial losses, reputational damage, and legal consequences. To protect themselves from these risks, many companies are turning to cyber insurance.
Which is no wonder, considering that:
“Small and mid-size businesses are bearing the brunt of losses due to cyber attacks, with firms dealing in revenues of $100,000 to $500,000 now get as many attacks as those in the $1 million to $9 million bracket.”
With staggering statistics like this, it’s clear that there is a considerable and (frankly, frightening) monetary threat to businesses of all sizes, but especially those who aren’t large enough in size to invest vast sums into cyber protection.
This is why more and more businesses are opting to pay a premium for a comprehensive cyber insurance policy that can save their business from closure (or more likely when) they experience a cyber attack.
In this article, we will discuss the four main types of cyber insurance policies that businesses should know about, in order to help you make a more informed decision.
What is Cyber Insurance, and Why Should a Business Get a Policy?
Cybersecurity insurance is a type of insurance that provides financial protection against the costs associated with:
- Data breaches
- Cyber attacks
- And other cyber events
This specialized type of insurance is meant to cover expenses such as legal fees, notification costs, public relations, and even the cost of repairing or replacing damaged systems or hardware.
The primary reason that businesses of all sizes should consider purchasing cyber insurance is because it is an effective way to manage the risks associated with cyber security threats.
Every business owner needs to consider that cyber attacks can be costly, and without the right insurance policy in place, businesses can be exposed to significant financial losses and devastating reputational damage.
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The Four Categories of Cyber and Privacy Insurance
There are four main types of cyber insurance policies, each designed to cover different risks and types of cyber incidents. These categories are:
- First-party coverage: This type of coverage is designed to protect a business against losses incurred as a result of a cyber attack or data breach. First-party coverage can cover costs such as data recovery, business interruption, and reputation management.
- Third-party coverage: This coverage protects a business against losses incurred as a result of a cyber attack or data breach that affects a third-party, such as a vendor or customer. Third-party coverage can cover costs such as legal fees, settlement costs, and damages.
A Startling Fact About Ransomware Attacks:
“In 2020, one in six businesses that fell victim to cyberattacks faced ransomware, and about half of them paid up the ransom.”
- Cyber liability coverage: Cyber liability insurance is designed to protect a business against losses incurred as a result of a cyber attack or data breach that results in a lawsuit. Similar to third-party coverage, cyber liability coverage can also cover costs related to legal fees, settlement costs, and damages.
- Privacy breach response coverage: This type of cyber insurance covers the costs associated with responding to a privacy breach. Privacy breach response coverage can cover costs such as legal fees, notification costs, and public relations.
Many insurance companies allow each of these policies to be tailored to meet the specific needs of a business, and many insurers offer customized packages that include a combination of these coverages.
Narrow down your cyber insurance options with these informative articles:
Getting Your Network in Shape to Receive Any Type of Cyber Insurance with CP Cyber as Your MSSP
Before a business can purchase a cyber insurance policy, they have to make sure that their network is secure and that they have taken appropriate measures to protect against cyber threats. This is where a Managed Security Service Provider (MSSP) like CP Cyber comes in.
CP Cyber offers a comprehensive suite of cybersecurity services designed to help businesses protect themselves from cyber threats. These services include:
- Managed SOC
- 24/7 Monitoring
- Penetration testing
- Vulnerability assessments
By partnering with CP Cyber, you can ensure that your networks are secure and that they are prepared to receive any type of cyber insurance coverage.
Wrapping Up What You Need to Know About the 4 Main Types of Cyber Insurance
To wrap things up, cyber insurance is an essential tool for businesses of all sizes to manage the risks associated with cyber threats.
By understanding the four main types of cyber insurance policies and working with a reputable MSSP like CP Cyber, businesses can ensure that they are prepared to protect themselves against cyber incidents.
Learn about getting a comprehensive vulnerability assessment and contact CP Cyber today to see how we can help your business qualify the cyber insurance coverage you need.