Cybersecurity regulations are changing, and cyber risk insurance policies will change accordingly as we enter 2022. As premiums rise, new exclusions crop up, and insurance companies deny coverage, you might have to rethink your insurance strategy. Here’s what you need to know about cyber liability insurance and how to get the best coverage in 2022.
In years past, the most significant risks to your business were offline: natural disasters, lawsuits, and employee injuries. Today, one of the biggest threats to your business is virtual. If you store confidential data and critical business documents on your network, it’s just a matter of time until a cybercriminal attempts to steal that information.
The aftermath of a cyberattack can cost you anywhere from a few thousand to hundreds of thousands of dollars—enough to wipe your business off the map. To protect your finances after a cyber event, you need a cyber risk insurance policy. This coverage helps you pay for certain losses, including compromised hardware, client lawsuits, and lost income following a cyber event.
Many small business owners assume that cybercriminals only target large enterprises. However, that’s not the case; 43% of cyberattacks involve small and medium-sized businesses. As a result, if you don’t already have cyber insurance, it’s time to invest in this essential coverage—and fast. Premiums are rising, and it will only become more difficult to get covered in 2022.
Cyberattacks are becoming more sophisticated, which means they’re costing businesses more money to clean up. Insurance companies, in turn, are paying more for cyber claims. To cover their financial risks, many insurance companies have raised cyber risk insurance policy premiums by 50% or more and denied coverage to some businesses.
There’s no way to avoid these cyber insurance premium increases, but you can keep insurance costs down by choosing your coverage limits carefully and adding extra security measures to your network.
Cyber risk insurance policies come in many forms and sizes. Depending on your risks, you may only need a few coverage types. These are some of the cyber liability coverages you can choose from:
- Network security coverage: This business insurance coverage is vital for any company that uses technology to store or process data. If you suffer a data breach, ransomware attack, social engineering attack, or other cyber incidents, network security coverage will help you pay for costs directly resulting from the attack. For example, this coverage would reimburse you for ransom costs following an attack.
- Privacy liability: You’re responsible for safeguarding private customer information, such as credit card or social security numbers. If you don’t, clients might suffer financial harm and sue you for damages. Privacy liability coverage helps you pay for these lawsuit costs following a data breach.
- Business interruption: When your computer systems go down following a cyberattack, you and your employees can’t work. This downtime can lead to thousands of dollars in lost profits. Business interruption coverage pays for lost income following an attack.
- Reputational harm: If customers learn that you suffered a cyberattack, they might not trust you to keep their data safe. Reputational damage coverage can help pay for public relations services and offset lost profits resulting from a publicized cyber event.
Some insurance companies combine cyber risk insurance policies with cybersecurity services. This combination is perfect for small businesses that don’t have the ability to protect their own network. Southpoint can help you decide if this coverage combination is right for your business.
Finding a cyber risk insurance policy that keeps your business safe without straining your budget is no easy task. As premiums continue to rise in 2022, it will be even more difficult for small businesses to get the right coverage. Luckily, with an agent like Southpoint on your side, you can get the best insurance quotes and find a policy that’s perfect for your business.
Our team members work closely with the biggest names in insurance to negotiate costs and get you more coverage for less money. We can help you combat the tricky cyber liability insurance market and choose the limits that fit your business.
Get in touch today to learn more about cyber risk insurance policies or request an insurance quote.