The Two Types of Cyber Security Insurance

cyber security insurance policy

In today’s modern business world most companies relay on the use of internet networks to conduct business, manage projects, process data between employees or clients and reach out to their customers. The dependence on modern technologies and the internet has made businesses a lot more vulnerable to cyber-attacks. Both small and large companies can suffer great damage from cyber-attacks, but small business in particular are usually the main target of hackers. Financial loss, damaged reputation, loss of important data are just some the effects that a successful cyber-attack can have on your business.

Protecting your company in the right way is the best defence against hackers. One of the best ways to keep your business safe from hacking and breaches of security is through a cyber security insurance policy. This is basically a type of insurance protection that is designed to cover the digital sector of the company and protect the overall business from risks and damages that can happen as a result of breached security. Getting a cyber security insurance policy is of vital importance for creating a smart strategy for risk management and quick response in the case of any kind of cyber events whether that be hacked system, service interruption, network outage, etc.

Cyber security insurance can be divided into two main categories: first party and third party. Most polices are a combination of both, but this is not always the case so it’s important to check what exactly would your policy cover in the evet of a security breach. A first party policy would usually provide coverage for damaged digital assets, like your data or software, increased operational costs due to hacked computer system and stolen money through hacked bank accounts. A third party policy is designed to cover the costs for lost customer data, customer notification, legal defence as well as any regulatory fines and compensations.

It’s essential to determine what kind of insurance policy would work best for business. To do this you would first need to identify all the risks that your digital sector might face in the event of cyber-attack. Performing a careful review of all your financial data, customer information and digital assets is also very important. All this will help you identify which are the most vulnerable areas to cyber-attacks. After you have recognized the main vulnerability points of your business the next step is to hire an insurance broker who specializes in cyber security. With their expertise and experience brokers can offer you professional advice and help you choose an insurance policy that best meets the needs of your business.

You may also like...