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Cyberattack is a danger for every individual and industry. It is a huge threat because it affects your business and identity. To avoid loss because of the attack, you can purchase cyber insurance from a trusted insurance company. However, how much cyber insurance do I need?
It is not always about the premium price. You have to make sure that the policies under the premium will protect you from every damage and risk you face. This insurance is crucial because small or large businesses nowadays are the target of phishing and malware.
How about the coverage, protection, and the cost of this insurance? Here is more information about cyber insurance and its coverage.
Definition of Cyber Insurance
Cyber insurance is a protection that will help you to recover from losses because of cyberattacks. When you decide to investigate the case, you will spend a lot of money on this. instead of spending the budget from your pocket, you can file a claim to your insurance company.
The insurance is not only for a company that works as a data storage. A small business that is not related to data storage needs this insurance as well. Data that your business saves on the internet is vulnerable to the risk of being stolen and misused.
How Much Cyber Insurance Do I Need?
If you wonder how much cyber insurance do I need for the business, you can check the scale of your business. Small businesses may only pay starting from $100 per month. Meanwhile, a big business may cost more than $400 per month. It depends on many factors and the insurance company will adjust.
Factors to Determine The Cyber Insurance Level
1. Exposure risk
Exposure risk is the basic question that an insurance company will ask you to determine your level. Some businesses might have unique cases. Generally, a business will save their clients’ identities such as names, DOBs, credit card numbers, and the bank they use.
The more exposure that it might affect the clients once a cyberattack occurs the higher your level in the insurance company. After all, the system that needs that information would cost a lot for protection. As for cyber insurance, the price for protection is more expensive.
2. Security practice
The security practice is also a determiner of how much cyber insurance do I need to pay to the insurance company. The better the practice, the lower the risk. Thus, the risk of getting cyberattack is also lower. The insurance company will also check your plan management.
When the agent from the insurance company finds out that the level of cybersecurity practice is very low and risky, they will charge you higher. Prevention is always crucial for any scale of business. With good practice, you may be offered with a few policies.
3. The types of policies
It is important to understand the policies that you would buy from an insurance company. It affects how much cyber insurance do I need and also the coverage. If you have a lot of clients’ information, consider buying a third liability insurance policy because it will cover the loss your clients experience.
The benefit of that policy is also covering the lawsuit that may happen because of misused information by the hacker. Another protection is getting covered in the case where there is an unintentional error in your business system. It is a helpful option for any scale of business.
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Coverage in Cyber Insurance
1. Data break coverage
This is a frightening issue for the business which holds clients’ information. Stealing data such as credit card information is dangerous for clients. They can file a lawsuit and it is a huge loss for your business. With this coverage, you can pay for a service to manage this issue in court.
2. Cyber attack coverage
Cyber attack coverage means the insurance company will pay out your Claim when there is an attack on your devices. You can reprogram your device to be free from viruses and malware. They also pay out your claim if the virus or malware attacks your business system.
3. Online fraud coverage
Everyone could experience online fraud cases where they suffer financial losses because there is a phishing scheme or problems with bank transfers. It could be a huge amount and handling the issue to the bank wastes your time. This coverage will help you to cover the losses.
4. Cyberbullying coverage
Dealing with a cyberbullying case is tiring because you have a lot of things to do to manage the case. There are expenses that you might spend on this. The insurance company categorizes cyberbullying in some forms, such as temporary private school and relocation expenses.
5. Cyber extortion coverage
Many cyber extortion cases occur in financial businesses, banks as example. The hacker sends ransomware that you cannot access anything from your system unless you pay some fees to the hacker. To manage this case, the business needs professionals, and the insurance will cover this.
How Does Cyber Insurance Work?
Aside from how much cyber insurance do I need, you have to know how this insurance works to save your business. Cyberattack is still the biggest issue in online business and data storage business. You have to buy cyber insurance to protect your data and system.
When a cyberattack occurs then you suffer from losses, you can claim insurance to handle the case, especially document recovery and legal fees. However, it still depends on which policies you buy and also the laws surrounding the business system.
The limit of coverage depends on the company you trust, their policy, and the case you have. For example, an online fraud limit is up to $15,000. The insurance company also can deny the claim when the case is like a ransomware attack because there’s no guarantee that payment will solve the issue.
Therefore, how much cyber insurance do I need will be different from one party to another. This is because every business or individual has different risks. The larger the size of the data, the more expensive the premium because the system is more complicated, especially for clients’ data.
