What is cyber insurance?
Cyber insurance coverage offers financial protection when digital attacks disrupt operations and compromise data. This type of specialized business insurance is also called cyber risk, cyber liability, and cybersecurity insurance.
As hackers become more sophisticated and threats evolve, having cyber insurance is a must for many businesses as part of their risk management strategy. It can help you respond to cyber incidents quickly, recover effectively, and restore customer trust.
Whether you're a small business with point-of-sale technology or a growing tech company that stores sensitive customer information, cyber insurance can safeguard your operation.
What cyber insurance coverage includes and why it matters
It's important to understand how cyber insurance works, what coverages are available, and what they protect against.
Progressive Commercial offers cyber insurance as a standalone policy and as a cyber insurance or data breach endorsement on a business owners policy (BOP). Read on to learn more about the ins and outs of cyber insurance and then start a quote online for a customized rate. If you have any questions, our expert agents can help you find the right coverage for your business.
What does cyber insurance cover?
Cyber insurance offers two types of coverage: first party and third party. First-party coverage helps your business recover from digital damage, like data loss and system downtime, and can pay for:
- Forensic investigations
- Data recovery
- Software damage
- Lost income
- Identity restoration
- Cyber extortion
Third-party protections apply when people outside your business, such as customers and vendors, are impacted by a breach or attack. Cyber insurance would cover legal fees and settlements, customer notifications, and more.
For example, let's say your business is subject to a phishing attack and an employee mistakenly shares a password to a database where customers' personally identifiable information (PII) is stored. Cyber insurance would help pay to investigate the breach and secure your database. It would also pay to notify customers that their data was compromised along with any associated settlements or legal fees.
Learn more about cyber insurance coverages.
What doesn't cyber insurance cover?
Cyber insurance offers robust financial protection for your business, but it doesn't cover everything. Some common exclusions include:
- Future revenue loss after an incident
- Theft of intellectual property or trade secrets
- Breaches caused by outdated or unpatched software
- System upgrades after an incident
- Cyber attacks linked to acts of war or terrorism
- Employee negligence or internal fraud
Why do I need cyber insurance for my business?
There are many benefits of cyber insurance for small businesses in today's digital climate. Cybercrimes are rising worldwide, with damages projected to cost around $1 trillion per month by 2031. Cybercriminals now use techniques like ransomware and AI-powered strategies to access confidential information.
Small businesses shouldn't leave themselves unprotected from attacks and breaches. A cyber insurance policy is a great way to safeguard your business and protect your customers' data from the financial and physical damage caused by cybercrimes.
Businesses that need cyber insurance coverage
Any organization, no matter the size, that manages sensitive digital data should consider cyber liability coverage. Because small businesses usually don't have cybersecurity systems as robust as large companies, they're often easier targets. The FBI's annual Internet Crime Report shows that compromised business emails alone cause more than $2 billion in losses each year.
Small businesses that should consider cyber coverage include:
How much does a cyber insurance policy cost?
What you'll pay for cyber insurance depends on how much risk your business faces, the sensitivity of your data, and the security protocols you have in place. The following factors will be considered when determining your rate:
- Business type
- Company size
- Coverage limits
- Claims history
Understanding what drives the cost of cyber insurance can help you find a policy that fits your needs.
What are cyber threats?
Cyber threats are attempts to access, damage, or steal data from your digital systems. Here are a few common examples to keep on your radar:
- Ransomware: Malware that encrypts your data until you pay a fee to restore access.
- Phishing: Fake emails designed to trick users into providing passwords and other sensitive information.
- Malware: Malicious software delivered via email, download, or corrupted websites that infiltrates systems to steal, delete, or manipulate data.
- Denial of service (DoS) attacks: An attack that overwhelms your system with traffic, making it inaccessible.
- Man-in-the-middle (MitM) attacks: When communication is intercepted to steal information.
- Insider threats: Unintentional or accidental exposure of sensitive data by employees or contractors.
Tips for reducing cyber-related threats
Follow cyber security best practices to help to keep your data safe and lower the risk of a data breach or cyber attack. Some basic guidelines include:
- Educating employees: Teaching your workforce about common cybercrimes, such as malware, ransomware, and phishing, creates a culture that encourages employees to report malicious activity.
- Keeping software updated: Outdated software is more vulnerable to security breaches.
- Creating strong access controls: Create strong password policies, implement multi-factor authentication for added security, and limit access to private data and systems.
Stay ahead of cyber threats
A data breach, malware attack, or computer hack won't come with a warning, but your business can still be prepared. An Incident Response Plan (IRP) can give you a clear path forward so you know how to spot issues early, take action, and bounce back. The right plan can help you recover from a cyber attack with purpose and confidence.
Safeguard your business with cyber coverage through Progressive Commercial
Progressive Commercial makes protecting your small business's digital operations simple. With tailored cyber insurance policies, expert guidance, and flexible coverage options, we help you stay ahead of cyber threats. We'll work with you to customize cyber insurance coverage that's right for you.
Get a fast, personalized quote today and find a cyber policy that fits your business.
