Cyber Insurance In Dallas: What You Need To Know
Cyber insurance is a specialty insurance product that protects your business from internet-based risks, more specifically, from risks related to information technology infrastructure and online activities. The coverage limits your company's liability from a cyberattack or data breach involving confidential and sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver's license numbers, or health records.
What Types of Cyber Insurance are Available?
There are generally two types of cyber insurance available, which protect your business under different circumstances.
First-party coverage provides financial assistance to the insured business to help with recovery costs. Depending on the type of incident, first-party coverage generally covers:
- Incident Investigation
- Risk assessment
- Lost revenue caused by business disruption.
- Ransomware attack payments
Policies often cover expenses associated with notifying customers about the cyber incident and, depending on the individual policy, may cover the cost of repairs to systems damaged by the attack.
Cybersecurity liability coverage protects your business when a third party sues for damages from a cyberattack or data breach. Whether your business serves firms or individuals, you may be liable for damages if their information is compromised due to a cyber attack against your organization.
The potential for a liability claim due to a cyberattack may be more likely than you think. Cyberattacks increased by over 50% in 2021, and officials and cyber security experts believe there is an increased risk due to global events and the prevalence of attacks organized by malicious nation-states.
Small to mid-sized businesses are becoming a common target of cybercriminals, and a ransomware attack can paralyze your business and leave you liable for your customer's financial losses. Cyber security liability coverage protects businesses in these scenarios and generally pays for:
- Attorney and court fees associated with legal proceedings
- Settlements and court judgments
- Regulatory fines for noncompliance
What Does Cyber Insurance Cover?
While nearly every business uses technology to some degree, the type amount they use varies greatly. Cyber insurance policies are designed to meet your organization's specific needs and provide several types of coverage.
Your company is responsible for your online data regardless of where it is stored. Whether you store data on your property, at an off-site location, or in a third-party technology company's cloud, you can be held liable if any personally identifiable information or protected health information is compromised.
Cyber experts recommend that you understand where your private and confidential information is stored to protect your company's data. In addition, experts suggest that you create, test, and implement policies and procedures concerning your collection and storage of data and have systems in place to remove data that is no longer needed.
When a cyberattack or data breach occurs, a cyber insurance policy can help cover breach notifications and remediation expenses. Cyber insurance can also cover costs associated with responding to and cooperating with regulatory investigators.
Today's workforce is more mobile than ever. The increased use of mobile devices such as laptops, tablets, and smartphones means it's more challenging to keep track of devices. Often devices leave the workplace and can become lost, stolen, or compromised, potentially exposing personal and sensitive data.
While you cannot completely prevent theft or a lost device, you can take steps to protect and limit the amount of data on each device by implementing procedures for creating effective passwords and mandating changes periodically. In addition, if a data breach occurs, a cyber insurance policy can include coverage that protects against failure to prevent unauthorized access or use of data containing private or confidential information.
Notifying customers of a security breach, which is mandated by law, can be expensive. Therefore, as part of a cyber insurance policy, your coverage typically includes the costs associated with all legally required notifications.
When a security breach occurs, it's vital to determine the extent of the breach and whether personal and sensitive customer data has been exposed. Your cyber insurance policy may include coverage for the cost of computer forensic experts. Your policy could also provide coverage for business losses and expenses that occur during the period of business restoration. Cyber insurance can ensure that you have the resources available to respond to a cyberattack or data breach effectively.
Why Is Cyber Insurance So Expensive?
Regardless of the size of your organization, it's likely that you depend on data to operate. That data includes various information, including sales projections, vendor lists, and sensitive personal information concerning customers and business associates. Unfortunately, without the proper security measures in place, you leave yourself open to attacks by cybercriminals, and the costs can be enormous.
As the threats of cyberattacks continue to rise, cyber insurance rates are also increasing. Rising rates are due to several factors, including politics, ransomware attacks, the growing threat to operational technology, and the continued fallout from several of last year's major ransomware attacks.
Who Needs Cyber Liability Coverage?
Any business that stores important data online or on computers can benefit from cybersecurity insurance. If your business stores data such as phone numbers, credit card numbers, or Social Security numbers, you are at risk of a cyberattOrganizations that store financial information or customer data should, at a minimum, consider first-party coverage.
When a business is the victim of a ransomware attack, it can lose valuable data, such as financial records, if it cannot respond to the payment demands. With first-party coverage, the insurance provider can step in to cover part or all of the ransom, depending on the policy's coverage limits.
Obtaining the Cyber Insurance Coverage You Need
Obtaining the cyber insurance coverage your organization needs can be complicated. Applications for coverage are becoming increasingly complicated, requiring technical information that can be challenging to provide for the average business owner. Therefore, your organization must have the right partner to help you navigate the cyber insurance maze and ensure that you have the coverage you need.
At Velocity IT, we can help your organization in the Dallas and Fort Worth area prepare for cyber insurance applications and ensure that you have everything you need to be secure and have the cyber insurance you need. Contact us today to learn more about how our team of IT professionals can help you get cyber insurance for your organization.
What is cyber insurance?
Cyber insurance is a type of insurance that protects businesses from the financial losses that can occur as a result of a data breach or cyberattack.
How much does cyber insurance cost?
The cost of cyber insurance depends on the size and type of business, as well as the coverage limits that are selected.
Who needs cyber liability coverage?
Any business that stores important data online or on computers can benefit from cybersecurity insurance. If your business stores data such as phone numbers, credit card numbers, or Social Security numbers, you are at risk of a cyberattack.
What does cyber insurance cover?
Cyber insurance policies can vary, but they typically cover expenses related to data breaches, including notification costs, credit monitoring, and legal fees. Some policies also cover the cost of ransom in the event of a ransomware attack.
How do I get cyber insurance?
You can obtain cyber insurance through a commercial insurance company or a specialty insurer that offers this type of coverage. You may also be able to purchase it as part of a business owners policy (BOP).
Is cyber insurance worth it?
The answer to this question depends on the individual business and its needs. However, for businesses that store sensitive data, cyber insurance can provide valuable protection in the event of a data breach or cyberattack.
What is the difference between first-party and third-party coverage?
First-party coverage protects the policyholder from losses that occur as a result of a data breach or cyberattack. Third-party coverage protects the policyholder from liability if they are sued as a result of a data breach or cyberattack.
I'm not in the Dallas or Fort Worth area. Can Velocity IT still help me?
Yes. We can help businesses in any location obtain the cyber insurance coverage they need. Contact us today to learn more.
Velocity IT is the leading IT services company for organizations and companies throughout Dallas and Fort Worth. We provide IT support and tech services in Garland, Frisco, McKinney, Carrollton, Coppell, Flower Mound, Richardson, Arlington, Dallas, Fort Worth, Mansfield, Mesquite, and all across the DFW metro area.
Check out our Google Reviews.
Velocity IT is your Total IT solutions and IT service provider!