Skip to main content

The Basics of Cyber Insurance and Who Needs It

By October 15, 2021Insurance

Since more and more people are working from home, it’s opened up companies to the increased threat of cyberattacks. Just like with your car or your health, it’s important to have a safety net if something goes wrong, and that’s where cyber insurance comes in. Because the internet has only been around for a few decades, there are some people who know little about what cyber insurance is about. Here are the basics of cyber insurance.


Cyber insurance is also referred to as cyber-liability insurance. Basically, it’s a policy that protects you against the aftermath of a breach of cyber security. It helps businesses stay on track and not lose a lot of time and money in the event of a cyber security incident that impacts the company. It helps you mitigate the costs of managing the attack and any financial fallout because of it.


Formally, cyber insurance is a contract between your insurance provider and yourself or your company that covers incidents related to the company’s computer use and network. While it’s helpful to have a policy like this in effect to help you recover as a business, it doesn’t take over the business’s responsibility to have active cybersecurity in the first place. In other words, this obligation of protection doesn’t shift to the insurer—it remains with the business. It’s also important to harden your target to make your business less attractive to cyber criminals.


You need to think about cyber insurance if you have a business that deals with anything online or stores or sends data electronically. It’s also important for any company that depends on technology to get work done. And, that’s just about any business nowadays. Think especially about companies that deal with other people’s private and personal data. If you store this kind of data, you are a prime candidate to be a victim of cyber criminals who will break in and steal contact details and bank data of your clients and customers.


The risk of cyber insurance will only continue to grow as cyber criminals become more creative and audacious. The world of cyberattacks certainly isn’t something that has easy solutions because really smart cyber criminals keep finding ways around the levels of protection, so the target keeps moving. A certain peace of mind comes from knowing even if you are attacked, it doesn’t have to bring down your business or even stop production. Check out your options, and see if there’s a good solution that fits your budget.