The digital revolution has brought countless benefits, but it has also put users at risk of identity theft and data breaches. For businesses, this not only affects the companies but their clients as well. That is why it is imperative for every business to have comprehensive insurance to cover them in case of a cyber attack. Before deciding which cyber risk insurance policy to choose, it is important to understand your options.
First-party coverage is what protects your business and your customers in the event of a cyber attack. It provides you with financial resources to compensate for any costs accrued due to the security breach. While the exact coverage will vary from policy to policy, first-party cyber risk insurance usually covers:
- Loss of revenue and business interruption
- Repair of damaged digital content and recuperation of the company’s reputation
- Stolen or ransomed data
- Temporary inaccessibility or complete loss of e-communication (emails, messenger, etc.)
- Monitoring clients’ credit
- Replacement and installation of equipment
Third-Party Defense and Liability Coverage
Third-party insurance covers the costs related to defense against lawsuits or liability claims filed against the company as a result of the data breach. Coverage often includes:
- Judgments, settlements or civil award payments
- Electronic media liability
- Employee privacy liability
Understanding your options will help you choose the right cyber risk insurance plan for your business. Make sure to carefully compare several insurance companies and/or use a reputable MGU or wholesaler.