Businesses must be aware of their vulnerability to cyber assaults. They are a significant issue for every company with a computer device that stores electronic data. Currently, ransomware is the most common type of cyber threat. It makes up the most significant cause of loss for small to medium-sized businesses in the U.S.
Ransomware comes in several forms, such as phishing emails, infected websites, online ads or vulnerable systems. Once your network is infiltrated, the criminals typically hold your network and data hostage until you make a ransom payment; but even if you pay, there’s no guarantee they will release your network or data.
Cyber insurance can help when ransomware devastation infects your network. Cyber policies include coverage for this type of loss exposure. Coverage is found under the insuring agreement as Extortion and, if needed, Replacement or Restoration of Electronic Data. Extortion coverage includes fees and costs associated with hiring a firm or organization to research and conclude the threat, as well as pay rewards and ransoms. Replacement or restoration of electronic data coverage includes the cost to replace or restore the data or computer programs, data entry, and computer consulting services.
The costs associated with a ransomware incident can be staggering, but with Cyber Insurance, the financial damage can be minimized. An occurrence may include the cost of recovering data, legal fees, media mitigation, and crisis management. A company can also face regulatory fines if employees’ and customers’ information is stolen.
Your company must understand that they need to take proper precautions to protect their systems by backing up data regularly and storing the backed-up data away from the network. The most substantial targets of ransomware incidents are employees. So, it’s vital to train employees on how to keep your company’s system safe. Unfortunately, though, even with the best internet security and training, your systems can be infiltrated if vulnerabilities exist. Without cyber insurance, an attack can devastate your business into insolvency.
Insurance is a risk transfer to protect your business from financial hardship or insolvency, but even when you are insured, your business benefits when you take responsibility to prevent losses from occurring.
Since not all cyber policies and coverages are created equal, it’s best to contact an insurance professional to discuss cyber coverage that will meet the needs of your business operations. For more information, see the Federal Trade Commission’s recommendations for small businesses.