Cyber Insurance US: A Must-Have for Every Organization

Cyber insurance is a must-have for every organization in the US. According to the FBI, cybercrime complaints have increased by 300% since 2017.

Data breaches can have devastating consequences for businesses, including financial losses and damage to reputation. In 2020, the average cost of a data breach was $3.86 million.

Many organizations are unaware of the risks they face, with 60% of small businesses reporting they don't have a cybersecurity plan in place. Cyber insurance can provide financial protection against these risks.

Additional reading: Cyber Insurance Data Breach

There are two main types of cyber insurance policies.

First-party cyber insurance covers the costs associated with investigating and responding to a cyber event and the financial impact on an organization's business operations.

First-party cyber insurance is crucial for organizations to recover from a cyber event quickly and efficiently.

Cyber insurance policies can be broken down into two distinct components:

Third-party cyber liability insurance provides financial indemnity as a result of a claim for damages caused by a cyber event.

Cyber insurance is a crucial investment for small businesses, as cyberattacks and data breaches are expensive and increasingly common. The global average cost of a data breach in 2023 was $4.45 million, with nearly 43% of cyberattacks targeting small businesses.

A cyberattack can put a business out of commission, making it difficult to recover from financial losses. Cyber insurance coverage helps businesses recover from such losses by paying for expenses like credit monitoring, attorney's fees, fines, data recovery, and other costly expenses.

Here are some examples of what cyber insurance can cover:

Cyber insurance can help reduce the potentially devastating effects of a claim, allowing businesses to focus on what matters most – running their business.

Cyberattacks are becoming more common and expensive, with the global average cost of a data breach in 2023 reaching $4.45 million. Small businesses are particularly vulnerable, with nearly 43% of cyberattacks targeting them.

The cost of a data breach can be devastating, often putting a small business out of commission. A cyberattack isn't just an inconvenience, it's a serious threat to the financial well-being of your business.

Ransomware attacks are on the rise, with 66% of organizations suffering at least one in 2021. These attacks can be particularly costly, with ransomware-related data leaks increasing 76% from 2022 to 2023.

The lack of visibility into identity-based incidents increases the dwell time, making it difficult for organizations to detect and remediate the incident before the damage is done. This is why insurers are becoming more discerning, requiring organizations to have comprehensive and complete visibility into their attack surface.

Here are some examples of the types of data that are often compromised in a cyberattack:

Having a cyber insurance policy can help reduce the potentially devastating effects of a claim, covering costs related to IT forensics investigation, data restoration, legal liability, and customer notification.

Breach recovery costs can decimate an organization. A single data breach can cost a business up to $4.45 million, on average.

The global average cost of a data breach in 2023 was $4.45 million. This is a staggering amount that can put a small business out of operation.

A study by IBM and the Ponemon Institute found that it can take around 241 days to resolve a breach if it's discovered internally, and up to 320 days if it's disclosed by a hacker. This prolonged downtime can lead to significant financial losses.

Cyber liability insurance can help cover the costs associated with breach recovery, including hiring a digital forensic expert to investigate the breach, customer notifications, and consumer credit and fraud monitoring services.

Here are some specific costs that cyber liability insurance can cover:

These costs can add up quickly, making it essential for businesses to have cyber liability insurance in place to protect against the financial fallout of a data breach.

Cyber insurance is designed to transfer an organization's financial risks related to a cyber event that it is responsible to prevent. This type of insurance is particularly important for organizations that manage personally identifiable information (PII) or are responsible for another party's network security.

There are two main types of cyber insurance: first-party coverage and third-party liability coverage. First-party coverage helps an organization pay for costs and expenses incurred from a data breach, such as forensic investigations, breach legal counsel, and notifications to affected parties.

Third-party liability coverage, on the other hand, helps an organization pay for damages resulting from a privacy event or unauthorized access to or use of a computer system due to a data security event. This type of coverage is designed to transfer an organization's financial risks it relates to a cyber event that it is responsible to prevent.

Some specific types of first-party coverage include data breach response, business interruption, contingent business interruption, system failure business interruption, reputation risk, ransomware extortion, and cyber crime. These coverages can help an organization pay for costs and expenses incurred from a data breach, such as forensic investigations, breach legal counsel, and notifications to affected parties.

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Here are some specific types of third-party liability coverage:

It's worth noting that some cyber insurance policies may have exceptions, such as financial fraud from social engineering techniques or the cost of strengthening a system after an attack.

Any business that stores or processes sensitive information needs cyber insurance. This data can include names, addresses, Social Security numbers, medical records or credit card information.

Some of the businesses that should consider a cyber policy include retailers, restaurants, hair salons and barbers, contractors, real estate agents, and consultants.

Here are some examples of businesses that should consider cyber insurance:

If you hire a third-party to handle your confidential data, such as an accountant or IT service, make sure they have their own cyber insurance policy in place.

As a small business owner, it's essential to consider cyber insurance to protect your business from costly cyberattacks and data breaches. Any business that stores or processes sensitive information, such as names, addresses, Social Security numbers, medical records, or credit card information, needs cyber insurance.

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In fact, the need for cyber insurance has expanded beyond just the healthcare and banking industries. Retailers, restaurants, hair salons, contractors, real estate agents, and consultants are all at risk of cyberattacks and should consider a cyber policy.

Some of the many businesses that should consider a cyber policy include:

The global average cost of a data breach in 2023 was $4.45 million, making it crucial to have cyber insurance coverage to help your business recover from financial losses caused by cyberattacks, data breaches, and other cyber events. Cyber insurance can pay for credit monitoring, attorney's fees, fines, data recovery, and other costly expenses.

A fresh viewpoint: Electronic Data Liability Coverage

If an IT consultant leaves data for a small healthcare company unsecured on Amazon Web Services, and a cyberattack exposes hundreds of Social Security numbers and email addresses belonging to the company's customers, the healthcare company could blame the consultant and file a lawsuit.

Cyber liability insurance for technology companies specifically covers legal costs in such situations, helping pay for defense costs and eventual settlements. Cyber liability insurance is essential for IT professionals to protect themselves from costly lawsuits.

For your interest: Healthcare Cyber Insurance

Cyber insurance costs can vary significantly depending on your business's exposure to cyber risk. A high-risk business needing $3 million in coverage can expect to pay more than a low-risk business needing $250,000 in coverage.

Other factors that affect your rate include network security, data access, and claims history. These factors can significantly impact your premium.

The average premium for cyber insurance is $145 per month, based on several factors including the amount of sensitive data handled, industry, coverage limits, and number of employees.

Company revenue, industry, number of customers, level of sensitive data or PII stored, history of insurance claims, and history of cyber events are all key factors that determine how cyber insurance premiums are calculated.

Here's a breakdown of some of the factors that influence cyber insurance costs:

The cost of cyber insurance can be a significant expense for businesses, but it's essential to consider the potential costs of a cyber attack, which can decimate an organization.