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Is cyber insurance essential for business owners?

Is cyber insurance essential for business owners?

On Behalf of | Oct 23, 2019 | Uncategorized |

Businesses and individuals/ entrepreneurs wouldn’t dream of operating without liability insurance. Taking out an insurance policy is a smart way to protect your business in case any of the covered events unexpectedly occur.

Insurance policies also serve as a relief point and a financial backup plan. And, now especially with the internet playing a significant role in the economic market, businesses are adding cyber insurance to the list.

What is cyber insurance?

Cyber liability insurance is a contract that protects companies that use publishing websites online, which contains confidential information. Any breach of data by hackers leaves businesses vulnerable to legal repercussions.

Types of cyber insurance

As with other insurance types, cyber insurance also has subcategory coverages. These include first and third-party coverages. First-party policies cover direct losses the organization might incur if hacked and personal information was stolen or shared across the internet. One of these losses is the loss of revenue during the time it takes to fix the data breach.

Third-party covers claims made against the company due to the data breach. Clients or partners might take legal action and sue the company for factors such as stolen identity, lost wages, damages to business reputation and many more.

Should you have cyber insurance?

No one is safe from online hacking and data breach. In late August of 2019, hackers breached 22 government agencies in Texas, which put them out of power and left them vulnerable. Hackers stole the state’s data and confidential information. This incident illustrates how widespread of a problem hacking has become for businesses and even governments.

Businesses may be able to protect themselves from hacks with a comprehensive cyber insurance policy in place. However, since hackers are unpredictable, companies might want to seek help if they end up facing charges.