Do you need cyber business interruption insurance? Chances are, this day and age, the answer is yes.
Business owners everywhere are becoming increasingly aware of their vulnerability to hacks and data breaches. And the loss or compromise of sensitive customer or employee data may lead not only to multi-million dollar lawsuits and fines but also to substantial state-mandated notification expenses.
So it’s not surprising that the global premiums paid for cyber-liability insurance are projected to increase from $5 billion today to a staggering $20 billion by 2025.
The Need for Cyber Business Interruption (BI) Insurance
But liability is only one of the cyber insurance coverages that businesses need to have in place.
In today’s economy, the financial consequences for a business that is prevented from trading by a data breach or IT outage may be just as serious as those that follow physical disasters such as flood or fire.
Business interruption insurance for cyber risks is now essential protection for most businesses and a rapidly growing market.
How to Get the Coverage You Need
But while this class of insurance is easy to understand in principle, it can be difficult in practice to get the coverage you need.
A traditional business owners’ insurance policy will typically contain BI coverage to be triggered in the event of physical damage to property. But cyber BI often demands a much more specific trigger, which will be harder to demonstrate.
Worse still, different insurers often use different trigger events. They may also apply different indemnity periods and times that must elapse before a claim can be made.
Contingent Business Interruption (CBI) Insurance
Furthermore, in addition to insuring against losses arising from a failure of your own systems, you also need to be aware of the risk of a failure of any shared systems or software or data storage service that you may use. Adding CBI coverage to your policy may, therefore, be an important additional protection.
So, with all these issues to consider, it’s crucial that you consider carefully the particular cyber vulnerabilities of your business, and take expert advice to ensure you get the coverage that’s right for you.
Mitigating Your Risk
And just as with physical risks, you also need to take steps both to prevent loss and to mitigate its effects if it does occur.
In the context of cyber BI insurance, this means using all possible means of protecting and backing up your systems and data, producing a comprehensive disaster recovery plan and carrying out regular due diligence on all third-party service providers. A written cybersecurity policy and appropriate staff training are also important.
Talk to Us
At Brashears, we know that these systems and procedures you put in place to mitigate loss can make a significant difference to the coverages you will be able to get and the premiums you will pay.
Our experts are ready and waiting to help you assess the unique cyber BI insurance requirements of your business and design a bespoke, cost-effective solution policy to meet them.
And you can start the process by calling us today on 805-564-7645 or sending us a message here.
We look forward to working with you.