While most business owners have heard of cyber insurance, many continue to go without. Only about one third of U.S. companies currently purchase some type of cyber insurance, largely because owners still question the purpose and function of the coverage.
Following are types of expenses that may be reimbursed by such a policy, according to CIO magazine:
- Investigation. A reported cyber breach must be diagnosed and often requires the services of an expensive, third-party security firm.
- Privacy and notification. Most states now have laws requiring businesses to notify parties who could have been affected by a data breach or cyber attack.
- Extortion. Insurance may also cover the costs associated with ransomware.
- Business losses. A variety of losses can cause financial and reputational damage to your business, including those associated with business interruption, crisis management and data recovery.
Cyber insurance—be it a comprehensive risk policy or narrower liability coverage—is complicated, and pricing is highly variable. Buying through an educated agent is essential.
