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Data Breach Insurance

When does a data breach occur?

Cyber insurance for many is not a matter of should I but a matter of what is the best for my business. Cybersecurity insurance requirements are a major factor in making sure you are getting the exact policy that you need. In order to meet complicity standards for these insurance requirements, you must follow the guidelines on the proper coverage that your policy needs to maintain.

It is important to highlight just the importance of cyber insurance. Benefits of having a cyber insurance policy far outweigh the risks of not having a policy in place. Without any form of cybersecurity insurance, you can risk paying thousands upon thousands of dollars in repercussive fees and out-of-pocket expenses. This can be extremely costly and detrimental to your business. Cybersecurity insurance for small businesses is extremely important for just those reasons. Just one minor data breach can cost you more money than you potentially have and can ruin your business and its reputation. 

Data breach insurance is exactly as it sounds. It is insurance that protects you in the event of a data breach. For any business that is dealing with secure or sensitive client information, it is important to look into data breach insurance. A cyber insurance policy sample is available on our website that covers the potential of a data breach. Our policy covers payment for losses resulting directly from the intentional misleading of an Insured to transfer money to an outside entity

A data breach occurs when “information is stolen or taken from a system without the knowledge or authorization of the system’s owner…Stolen data may involve sensitive, proprietary, or confidential information such as credit card numbers, customer data, trade secrets, or matters of national security.

The effects brought on by a data breach can come in the form of damage to the target company’s reputation due to a perceived ‘betrayal of trust.’ Victims and their customers may also suffer financial losses should related records be part of the information stolen.” While you can take steps to protect your and your business’s data center and overall cybersecurity systems, it does not guarantee that your business will be 100% safe and secure from any potential cyber attack. These steps do not tend to deter cyber attackers from attempting to infiltrate your system. It should not deter you from taking those steps to protect your business in the first place. Cyber insurance serves as a protective effort after the fact of a cyber attack. 

Different policies will cover different things, but you want to make sure that you are getting the right coverage package for your business and what it serves. If you are concerned about the costs to replace devices, you should make sure your policy covers device replacement. If you are concerned about malware attacks, your policy needs to state its coverage around said attacks.

Secure for the known, insure for the unknown

Your destination may be achieving compliance in industry certifications such as SOC2 or ISO27001, but it doesn’t stop there. With Trava, our modern tools can help you bridge the gap between where you are and where you want to be by giving you the control to assess your risk, repair the most vulnerable areas, and transfer risk through insurance.

Cyber Liability Coverage

One aspect of cybersecurity that you may want to have included in your cyber insurance plan is cyber liability coverage. Cyber liability insurance is an insurance policy that provides businesses with a combination of coverage options to help protect the company from data breaches and other cybersecurity issues. It's not a question of if your organization will suffer a breach, but when. The coverage provided by a cyber liability coverage plan can benefit you from paying out-of-cost expenses for potential fines or damages. 

You may think you know what cyber liability insurance covers based on what we have already mentioned, but what does cyber insurance not cover? This can vary from policy to policy, so make sure you are able to analyze the differences between potential policy choices. Competitors will offer different levels of security based on your coverage plan, however, all plans must cover the cyber liability insurance requirements. 

For example, we offer different options from Chubb cyber insurance. While they offer much of the same benefits that we do through our insurance system, we also offer different options that may benefit you more than a Chubb plan would. For example, our specific security breach liability policy covers payment card industry fines and penalties. Specifically, we offer these two things: 

Cyber Insurance Requirements

No matter what, if you are a business that is operating in some fashion in the online sphere, you need to get cyber insurance. Specific cyber insurance requirements will vary depending on your specific market, size, etc. If you are questioning “Is cyber insurance worth it?”, the answer is always yes. The cyber insurance market can be very broad and oversaturated because of that. You need to make sure that keep focused on what your priorities are when it comes to navigating the market to find the right plan for you. 

Keep in mind these components from a cyber insurance coverage checklist to make sure you are finding the best policy for you:

  1. Forensic Expenses: You have determined that data has been compromised and need to investigate what happened, how it happened, and what information was accessed. The expenses to hire an outside forensic team for discovery is covered.
  1. Legal Expenses: You will need legal representation in order to determine the scope of the federal and state notification requirement breaches. You will also need legal counsel to defend you in the event a suit is filed against you.
  1. Notification Expenses: These expenses can include postage, paper, printing, call centers, etc.
  1. Regulatory Fines and Penalties: What more can I say? The government will want, and get, their pound of flesh.
  1. Credit Monitoring and ID Theft Repair: While not legally required, it is generally agreed that offering these services to the affected parties will reduce potential legal liability and is considered the right thing to do.
  1. Public Relations Expenses: The manner in which the breach is reported to the media is crucial to restoring your reputation and maintaining your clients, vendors, business associates, partners, and patients.
  1. Liability and Defense Costs: It's not uncommon for class action lawsuits to be filed against you following a breach. You will need legal representation which can be of your own choice or appointed by the carrier. Either way, coverage is available for these costs.

Most policies will include some coverage for all of these components. To make sure that you can monitor your coverage, you should request a copy of your plan for cyber insurance. PDF copies are the most recommended as they are easily transferable and are the most manageable for most people.

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Types Of Cyber Insurance

There are many types of cyber insurance in the cyber insurance market. You must make sure that no matter your policy, it aligns with cyber insurance requirements. 2022’s cyber insurance requirements can be found at https://www.nist.gov/

There will be a difference between the cyber insurance for individuals and cyber insurance for businesses, so make sure you are looking at the correct cyber insurance pdf that contains the accurate requirements. You will also want to make sure and take note of what cyber insurance does not cover versus what it does.

There are many different types of cyber insurance, but privacy liability may be the most important for you and your company. Privacy liability insurance can typically cover the following:

Cybersecurity Insurance Companies

There are many different cybersecurity insurance companies that want to make sure you get the best cyber insurance possible that will fit all of your needs. For example there’s Hiscox insurance, Beazley cyber insurance, and AIG cyber insurance. They are in the cyber insurance market to make sure you get the best policy. They have copies of cyber insurance pdfs on their websites, outline “what does cyber insurance not cover”, and have a cyber insurance coverage checklist. They are also up-to-date on the cyber insurance requirements. 2022 has some updates in regards to cyber insurance requirements, and they are aware of that when creating your policy. 

Now is the best time for looking into getting cyber insurance for your business. If you have concerns or questions about cyber insurance or what policy might work best for you, you can look at our website travasecurity.com and contact one of our customer service agents. You can also book a demo with us to learn more about our services and how we can help keep you and your business safe from the online world. 

Sources

https://www.trendmicro.com/vinfo/us/security/definition/data-breach 

https://www.travelers.com/cyber-insurance 

https://www.myknowledgebroker.com/blog/business-insurance/7-key-coverage-elements-of-cyber-liability-insurance/ 

https://www.nist.gov/ 

https://cyberinsureone.com/types/

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