When it comes to taking out insurance for anything, it can be a controversial issue. Many people tend to wonder why they should get insurance when the chances of something happening are slim, or they feel as though the insurance wouldn’t really help them out much if something did happen. This isn’t any different for cyber security. No matter how much you’ve already invested in preventative security measures, it’s still vital that you take out cyber insurance.
The Risks are Just Too High
When it comes to cyber security, the risks of not getting insurance make it a no-brainer. There are thousands of ways data can be breached, and those numbers are only continuing to grow. You can be hacked through independent devices, social media, software, ransomware, malware, etc, etc. The list goes on and on and a company should never think of itself invincible to an attack.
Insurance Always Serves a Purpose
Even if you take all the proper precautions and have a vendor or IT team to help you with managing your network, there’s never really any guarantee there won’t be a breach. Therefore, it’s really important to take out insurance because it can cover you for indirect costs, such as sending letters to those who were affected (which can be rather expensive).
It’s a Good Time to Take Advantage
Cyber security insurance hasn’t been around for too long. In fact, it’s a rather new concept, which began roughly around 2005. However, by 2020, it’s predicted that the total cost of cyber security premiums will reach $7.5 billion. Therefore, there’s still time to take advantage of this new “trend” before it starts becoming more pricy.
Think About What You’ve Heard
Major companies have had data breaches, including Target in 2013. This year alone, there have been attacks on Snapchat, the U.S Department of Justice, Yahoo!, and Oracle. And, let’s not forget about the Ashley Madison hack in 2015. If hackers want to get your information, they’re going to get it, and it doesn’t matter whether you run a jewelry store or thrift shop. Your information and the information of your customers can be gold in a hacker’s eyes. If it can happen to these companies, it can happen to you, too.
Each Potential Data Breach Requires Default Costs
When you think about the potential of your company having a data breach, it may seem like something you’d be able to take on, especially if your company is small. However, each data breach, no matter the size or equity of the company, has default costs associated with it. Companies must pay for a forensic investigation, business losses, privacy and notification, and potential lawsuits and extortion. Of course, cyber insurance would help take care of a majority of those things.
But, Insurance Is Not As Expensive as You Think
Compared to the crazy costs of repairing a breach, cyber insurance costs nothing. While we’d like to give you a precise number, the fact of the matter is that premiums can range a lot. It all depends on the size of your business, what kind of coverage you’re looking for, data risk exposure and the revenue of the company. But, when you think about how Playstation’s 2011 data breach costs them $171M, a lot of which could have been offset by cyber insurance, you might realize you want to avoid that for your business.
You Can Sit Back and Relax
When it comes to taking out cyber insurance, there’s not too much you have to worry about. The first thing you should do is create a cyber risk profile for your company. You should think about if you were to have a data breach, what kind of estimated costs would you have to make repairs? Then, sit down and discuss your budget. Lastly, consult insurance companies, many of whom have insurance calculators on their website, to see what your company can afford to pay (and what you can’t afford to lose).
So, are you ready to invest in cyber security insurance? Smeester & Associates can help give you the tools and recommendations you need to choose the insurance policy that’s best for your company.