What is “Standalone” Cyber Insurance, and Who Needs It?

You’ve probably heard people say “cyber insurance” a lot more frequently lately. You may have also heard about “data breaches”, “cyberattacks”, “hackers”, and other terms that sound like something out of a movie. But this is reality, and the reality is that any business that holds customer data has a risk for that data to become compromised.

What you may not have heard is that around 76% of these incidents with data occur at businesses with less than 100 employees. So no matter the size, protecting your business’ data is key. 

Even with the right measures in place, a breach of your data can occur –

And the impacts can be devastating. Small business breaches cost companies an average of over $3,500 per employee. In addition, almost 60% of these companies go out of business within six months of a cyberattack.1

Should your business fall victim to one of these attacks, it is critical to have response measures in place. Part of that response should be your insurance coverage. Often, business insurance policies some level of coverage for cyber – but the limits may not be enough for what you need. A “standalone” cyber insurance policy may more properly cover your business’ unique risks. These policies can vary in terms of what they provide, but generally there are two main types of coverage:

First Party Coverage:

This type of coverage provides help with costs to your business associated with the recovery from a cyberattack. Depending on the type of attack, a first party policy can cover ransom payments, lost revenue due to the interruption of business, and rebuilding. The most common type of first-party coverage is Data Breach Insurance, which is a type of policy that specifically focuses on exposure of private data from your company.

Liability Coverage:

This type of coverage covers legal fees and judgments in the event customers sue your business after a breach. It can also help cover regulatory costs from the government in the aftermath of a breach, like fines and investigations. A liability policy can also cover costs associated with notifying affected customers and helping them to protect themselves from fraud that may happen as a result of an attack.

The key for what you need is to understand your exposure. Let our agents talk with you and help you understand your risks and your options for coverage.

1 – 2021 data according to SCORE