Most businesses today do not have a cyber insurance policy. Partly, this is because the owners don’t understand the available coverage options and how their premiums rates are determined. However, the rise in cyber-attacks since the pandemic has made insurance very crucial for companies that handle/store customer data or digital process transactions. Read on for deeper insights about businesses' need for cyber insurance protection.
A study by Insureon showed that 27% of small businesses spend less than $1,000 on cyber liability insurance yearly. About 36% invest between $1,000 and $2,000 in coverage annually. For most of them, the median premium rate per month is $140.
Their policies provide coverage amounts between $1 million and $5 million or more. A regional bakery with fewer customers and smaller revenue would typically require a lower limit and pay less for coverage. An online and brick-and-mortar retailer with a national customer base would probably pay more.
A cyber incident involving a credit card processor for a Texas-based business demonstrates the importance of carefully reading the insurance policy document. The payment processor lost over $10 million after being tricked into changing disbursement instructions. As per the language on the Texas business' cyber insurance, the policy would only cover losses if the Texas company was the victim. After a lawsuit, a court agreed to the cyber insurer’s denial of the claim as the credit card company was the victim rather than the covered policyholder.
Before issuing your cyber insurance policy, your provider will audit your company for the following issues:
Even with the measures you have in place to prevent a data breach in your organization, cyber-attacks can still occur. A cyber insurance policy would provide an additional layer of protection to avert significant financial loss in the event of a network attack or data loss. Contact our experts at Humble Insurance Group today to get started on customized cyber liability coverage.