As we are entering a digital era, and cybercrime is on the rise, we will continue to see a need for cyber insurance. It is intended to protect companies from unexpected financial losses due to a cyber incident. This could be a small cost of having to restore from a backup, to a huge cost, including lawsuits and fines. Most small businesses don’t have the resources set aside to handle a cyber incident that big corporations do or the high-tech security to prevent it. Therefore, cyber insurance to help protect the business in case of a cyber-attack, as well as help them recover quickly, is definitely a good investment.

Each insurance company will have their own policies, classifications, and can customize a policy to meet the small business needs. Generally speaking, you have three broad categories coverage will fall into.

Cybertheft Insurance (First-Party)

Cybertheft insurance will protect you from loss of data and/or theft. It can help protect you from cybertheft, such as embezzlement scam and payroll redirection. This will cover your cost to get your data restored and the cost to get you back up and running.

Cyber Liability Insurance (Third-Party)

This type of coverage will cover third-party damages. So, if a partner, customer, vendor, or employee’s sensitive information s compromised, your insurance can cover the cost of damage to them. In addition, it will cover any litigation costs, communications and notifications to customers/public of the breach, and any regulatory costs. This will protect you from third party compromises and cover post-incident costs. Data privacy is a growing trend and new laws, regulations, and lawsuits are on the rise.

Cyber Extortion Insurance

This is a specific type of insurance that is specifically for ransomware, or other types of extortions. The insurance can help pay the ransom payments, recovery costs, business interruptions, and more. It can also pay for you to bring in a team of experts to help with the extortion, forensics, and recovery.

Every company is at risk. Hackers are getting more sophisticated and constantly finding creative ways to infiltrate networks. Cyber Insurance can give you a little piece of mind that you can recover. It is up to you and your business to pick the right plan.