Cyber insurance

5 min read

getting a small business loan

What is cyber insurance?

You may think your General Liability insurance policy is all your business needs. But these policies don’t cover the loss exposures that cyber insurance policies do! What happens if your company is hit with malware, ransomware, or suffers a data breach? You need cyber insurance.

Cyber insurance (a.k.a. Cyber Liability, Internet Liability, Electronic Media Liability, and Network Security & Information Liability insurance) helps companies weather the storm from technology-based risks. This includes risks associated with a company’s IT infrastructure and activities such as systems failure, cyber attack, or data breach.

Need cyber insurance?

Get a quote
Talk to an insurance expert: 1.800.515.8366

What does cyber insurance cover?

Every business faces cyber risk, no matter how small. Cyber risk includes privacy risk, security risk, and operational risk. Cyber insurance helps cover legal fees and expenses, but it can also help you with other essential tasks, including:

  • Forensics
  • Negotiation and payment of a ransom demand
  • Recovering compromised data
  • Notifying customers of a data breach
  • Public relations expertise
  • Credit monitoring and identity restoration
  • Losses that arise from security failures and system failures

Who needs a cyber insurance policy?

Any business big or small that relies on technology to operate needs cyber insurance — even something as basic as email. Organizations that process sensitive information like names, addresses, Social Security numbers, credit card information, or medical records face additional exposures. It’s also worth noting that any third party who handles your data or confidential information, like an IT company, should have their own cyber insurance policy.

Questions to ask yourself when trying to decide if your business needs cyber insurance:

  • Do we use digital platforms, such as email, to send communications?
  • Do we collect, store, send, or receive personally identifying information (PII) or protected health information (PHI)? This is typically defined as any information about an individual that is required by any local, state, provincial, territorial, federal, or foreign law or regulation to be protected from unauthorized access, acquisition, or public disclosure.
  • Do we work in an industry with rules about customer information, such as healthcare, education, or finance?
  • Do we run a business that uses and stores digital data in other industries? These include retailers, contractors, restaurants, real estate agents, hair salons, consultants, marketing agencies, etc.
  • Would we be able to navigate and bounce back from a cyber attack today? The average cyber event targeting small businesses costs $150,000.

How much does cyber insurance cost?

When comparing cyber insurance policies, it’s best to shop by coverage rather than cost. Different factors can impact the cost of your cyber insurance policy, mainly your company’s sophistication and ability to avoid a cyber incident.

Your cyber insurance cost may depend on:

  • Your company’s technology and network security
  • Number of customers, clients, or patients
  • The type of sensitive data and information you collect
  • Your company’s revenue
  • Your claims history

What does cyber insurance not cover?

All insurance policies have exclusions, and cyber insurance is no different. Cyber insurance policies typically, among other things, does not cover:

  • Loss of value due to theft of your intellectual property
  • Events that occurred prior to the policy period
  • Fraud committed by senior executives
  • Costs to improve your security and technology systems after an attack (though some more comprehensive policies do)
  • Reimbursements for future profits lost due to a cyber attack or data breach (though some more comprehensive policies do)

Where do you go from here?

Not all cyber policies are equal. When purchasing cyber insurance, carefully review all coverages and policy language, then decide what is best for your business. We also recommend that you consult with an experienced insurance broker. QuickBooks has teamed up with Coalition to make sure your business has the right cyber insurance coverage at the right price. Contact QuickBooks Insurance to obtain free quotes, so you can confidently manage your business.