Paige Cerulli Last Updated On: July 18, 2024

Cyber Security Insurance

Accepting digital payments, storing digital customer information, and even simply using computers to operate your business all come with risks. In fact, according to the University of Maryland, cyber attacks occur every 39 seconds, and the computers in the university’s study were attacked an average of 2,244 times per day. With the increasing risk of cyber crime, cyber liability insurance is an essential investment for most businesses.

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What Is Cyber Security Insurance?

Cybersecurity insurance helps to cover the risks of using computers and technology while running your business. This coverage helps to protect your business from the potential cost of a data breach or other cybercrime. That cost can be staggering, and IBM reports that in 2023, the average cost of a data breach was $4.45 million.

What Does Cyber Insurance Cover?

Cyber coverage insurance covers numerous cyber-related risks, such as phishing attacks, malware, data breaches, stolen technological devices, and ransomware. Your coverage may include expenses like:

  • Costs resulting from a phishing attack, data breach, or cyber extortion
  • The costs of defending your business against data privacy lawsuits
  • Crisis management expenses for a cyber attack
  • Lost business income resulting from a network outage
  • Regulatory fines for violating state or federal agency data regulations

What Does Cyber Insurance Not Cover?

Some insurance companies provide the above coverages under a cyber liability insurance policy, while others may divide coverages into cyber liability insurance and a separate data breach insurance policy. You’ll need to read your policy to confirm what’s included and what’s excluded.

Additionally, your business will need other types of insurance for full coverage. For example, general liability insurance protects you from property damage or bodily injury claims, while professional liability insurance provides coverage in case of a claim of negligence or omissions in your professional services.

Does Your Business Need Cyber Liability Insurance?

Since the potential for cyber attacks is so high, cyber risk insurance has become essential for many businesses. With insurance, your business will be better prepared to cope with the financial losses of an attack. Without insurance, a cyber attack could be financially devastating and potentially bankrupt your business.

Every type of business, including small brick-and-mortar businesses and global corporations, faces cyber risks. However, certain practices can increase your vulnerability to and potential liability in the event of a cyber attack. It’s essential to invest in cyber liability coverage if your business:

  • Heavily depends on technology for its daily operations
  • Accepts payments in the form of credit cards
  • Stores your customers’ or clients’ medical, financial, or personal information

How to Get Cyber Liability Insurance

Cyber security insurance policies are available separately from your businessowners policy coverage. The cost of cyber insurance varies depending on your business size, your industry, and how you’re using technology. You can get free cyber insurance quotes today to start exploring your coverage options.


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