Why Your Business Needs First-Party Cybersecurity Insurance
If your business stores large amounts of sensitive data for clients, then you can't afford to operate without first-party cybersecurity insurance coverage. Here are some of the ways your cybersecurity coverage can help with:
It is your responsibility to notify your customers about any data breach that may affect their information. In fact, one of the most common blames that businesses face when dealing with cybercrime is the delay in notifying affected third parties. Whether you have to make phone calls, buy newspaper space for notification, or use TV infomercials, your cybersecurity coverage should be able to help you pay for the notification.
An emerging cybercrime is one where criminals lock you out of your system or steal your clients' data and threaten to release them to the public if you don't pay a ransom. Now, it is an ongoing debate whether you ought to pay for such ransoms or not; some are of the opinion that paying ransoms encourages cybercrime. However, if it ever happens to you, it is your decision whether to pay the ransom or not. Cybersecurity coverage will help you pay the ransom if you decide to go that route.
Compensating Lost Income
It's possible for a cybercrime incident to cause loss of income, which can happen in various ways. For example, you may not be able to engage in some of your critical operations (such as processing clients' payments) if you are locked out of your network. Compensation for the lost income is another benefit you may enjoy from your cybersecurity insurance coverage.
Public Relations Costs
One of the most damaging things about cybercrimes is that it can take your reputation to the gutters. This is because many people will be afraid to deal with you for fear that their data may be compromised too. It will be up to you to convince the public that your system is secure and you can still be trusted with their information. Of course, this also costs money – money that can come from cybersecurity insurance claim.
Monitoring Credit for Affected Clients
If your customers are affected by data breach on your system, it's your responsibility to know the extent of the damage and limit as much as possible. A common side effect of such crimes is that the credit scores of the affected customers take a serious hit. Therefore, you need to have a monitoring program in place to gauge the effect on your clients' credit, and this also requires money.
Note that the scope of coverage offered by cybersecurity commercial insurance varies by carrier. Talk to your insurance agent to help you get the right coverage for your business.