Who Needs Cybersecurity Insurance? Importance & Benefits

In today's digital landscape, cybercrime is a growing concern for businesses of all sizes. From data breaches to ransomware attacks, the potential financial and reputational damages can be devastating.

To protect against such financial loss and liability, one solution is to have a cybersecurity strategy that includes both proactive and reactive measures. One proactive measure is cybersecurity insurance, which provides essential protection to mitigate financial losses when an organization is the victim of a cybercrime.

Only 17 percent of small businesses have cyber insurance, according to a study from StrongMD. That same study found that 64 percent were not even familiar with cyber insurance! That’s why we have created this article that explains who really needs this type of coverage, and explain why it's an important consideration for small-to-midsize businesses.

What is Cybersecurity Insurance?

Cybersecurity insurance is a type of insurance policy designed to help the policy holder cover the expenses associated with a cybersecurity incident. This might include legal fees, investigation costs, additional labor to identify, neutralize, and remediate the threat, and more.

While cybersecurity premiums are rising, there are many cybersecurity best practices that you can follow. You can also partner with an IT managed service provider to assist you with lowering the costs.

How Big of a Problem is Cybercrime?

Every day, thousands of teams experience some level of crisis resulting from a data breach, network disruption, or potential extortion perpetrated through the internet.

60 percent of small businesses that experience a cyber attack go out of business within six months. These statistics highlight the importance of taking proactive measures to protect against cybercrime and having a plan in place.

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A single cybersecurity incident can stop your business in its tracks and open the door for privacy and trust concerns that impact your business’ reputation. This, on top of major disruptions to your day-to-day operations that a hack induces, adds up to hefty financial losses.

4 Benefits of Cybersecurity Insurance

Small businesses can no longer assume that hackers are only after the bigger fish. But who needs cybersecurity insurance, especially among small businesses and other organizations? To help you answer that question, consider the benefits of cybersecurity insurance that could impact your overall cybersecurity preparation.

1. Legal Support

If your organization had a breach, your organization could be held liable. Many policies provide legal support to help businesses navigate the complex legal landscape that can arise after a cyber attack.

2. Incident Response

Have you considered what the real cost of a breach might be? With the global average cost of a data breach around $4.35 million, cybersecurity insurance can be the lifeboat to fund your recovery.

Some policies include incident response services that help businesses respond to a cyber attack in record time.

3. Cyber Vandalism Loss Recovery

The financial impact of a cyber incident comes in waves. Before you pay legal fees or spend money on data recovery, you’ll likely deal with immediate operational losses as your ability to do business is disrupted.

How long it takes to get you back in business depends on a number of different factors. Cybersecurity policies can include cyber vandalism clauses that can help you cover portions of these losses from fraudulent sales transactions, operational downtime, and lost customers.

4. Proactive Security Boost

As a requirement for coverage, most policies will require a minimum standard in cybersecurity protection, along with IT best practices like multi-factor authentication. Your MSP IT partner can help you with these proactive steps to protecting your organization from a bigger problem down the road.

In many ways, simply looking into how to reduce your high premiums can help you realize how to increase your protection.

Who Needs Cybersecurity Insurance?

Small-to-midsized businesses and organizations that have data or employees are at risk for cyber attacks. It’s in their best interest to weigh the pros and cons of purchasing cybersecurity insurance as part of a comprehensive cybersecurity strategy.

Learn what common cybersecurity mistakes your organization is making in this article!

Organizations that handle sensitive data, such as personal information or financial information, are at an especially high risk. One way to address this risk is to prioritize their cybersecurity strategy, which can include cybersecurity insurance.

As a Managed Service Provider (MSP), our IT experts can help your business with both proactive and reactive cybersecurity measures. We can assess your current security posture, identify vulnerabilities, and implement IT best practices to help prevent a cyber attack.

In addition, we can also help you navigate the complexities of purchasing and implementing cybersecurity insurance, and provide incident response and data recovery services. Our team of experts can provide the support you need to protect your business and be prepared for any cyber attack.

If You Have a Business, You Should Strongly Consider Cybersecurity Insurance

With 83 percent of small businesses without a policy or insurance safeguard, a cyber attack could be catastrophic. Companies that collect, store, or process personal data are the most likely to be targeted. And, among them, B2B service providers and small organizations are the targets at most risk.

By having a comprehensive cybersecurity strategy in place, which includes both proactive and reactive measures, and purchasing cybersecurity insurance, organizations can protect themselves against the financial and reputational damages that can result from a cyber attack.

But where can you get started to learn about the insurance plans that best suit your IT needs while also reducing your cybersecurity insurance premiums?

Ceeva is a one-stop solution for managed IT, cybersecurity, and compliance training that can help you meet all the requirements to purchase a less expensive cybersecurity insurance policy. Learn more about our scalable Pittsburgh-based cybersecurity services today!