Understanding Cybersecurity Insurance

Cybersecurity best practices are an important topic for business owners and executives. The question is "Are you doing enough to protect your business from Internet-based risks?" 

Did you know that Canada reported 21 major cyber-attacks in the first half of 2022? That's an increase over the second half of 2021 when 18 were reported. Cybercrime, and its victims, are real and the results are often devastating.  

Too often, it's only the large data breaches that make headlines. Smaller businesses may think they are not important enough to become targets. The truth, however, is we live in a world where everyone relies on computer systems and digital information. Hackers love to take advantage of this. 

Cybersecurity best practices are an important topic for business owners and executives. The question is "Are you doing enough to protect your business from Internet-based risks?" 

Thankfully, there are ways you could lower these risks and, with them, also the costs associated with your IT workforce and cybersecurity insurance.

But first things first!

What Is Cybersecurity Insurance?

This financial product is a form of risk management and a means of protecting businesses and individuals against financial loss that would result from malware infections, data breaches, and other types of cyberattacks.

Who Does Cybersecurity Insurance Benefit?

While individuals can get cybersecurity insurance as optional coverage to homeowners insurance, its main beneficiaries are small to mid-sized businesses. Some industries are more exposed than others because of the amount of highly sensitive data they employ. This is why businesses in healthcare, retail, and financial institutions tend to have higher insurance costs. They also stand to benefit more from it.

How To Take Out Cybersecurity Insurance

You can contact any insurance agent you like and describe your business and the expectations you have from cybersecurity insurance, or you can easily apply for one online and get a tailored quote that suits your needs.

Most forms will need you to provide information about the industry you operate in and the services you provide, projected revenue and its source, number of employees, cybersecurity measures you currently have in place, and whether you hold any sensitive customer data.

Yes, your cybersecurity level is of interest to insurers, and the more best practices you adopt, the lower the insurance cost will be. Outsourcing your network security to a reliable managed service provider like Quercus IT will also help you lower the insurance premium, especially if you represent a small business. This is because insurance companies have high cybersecurity requirements and may not trust a small company to carry out all the necessary IT work internally.

An MSP will help you with very important aspects like business continuity and disaster recovery plans, data retention and protection, identity and access management, and compliance with cyber regulations and laws. They can also offer you security training to minimize human error and help promptly with incident response.

What Does Cybersecurity Insurance Cover?

Broadly speaking, cybersecurity insurance is meant to cover legal costs and other expenses related to containment and repairs following a data breach or a successful hacking event. These typically include costs associated with incident response, system damage and restoration, legal advice, credit monitoring, and notification fees.

No insurance comes as a one-size-fits-all and you can also opt for:

• Social engineering fraud coverage.
• Coverage for loss of funds from phishing or hacking.
• Coverage for losses because of a cyberattack-related system outage.

Stay Safe With the Best Cybersecurity Practices

Cybersecurity insurance is only one of the measures your business can take to mitigate cyber risk. Before applying for it, make sure you adhere to best security practices and contact us to help you reduce issues and educate your team with the managed IT solution that suits you best.