Preparing for Cybersecurity Insurance 101: Everything Your Business Needs to Know

employee making a purchase at work

Not getting insurance for your car is risky—not having insurance for the business you’ve spent so much time and money on is … on a new level. The average data breach cost for small businesses can go from $120,000 to $1.24 million depending on your industry and how valuable your data is.

Most small and medium-sized businesses (SMBs) don’t have $120,000 stocked away for a cyberattack or natural disaster, which is why cybersecurity insurance can be the difference between bouncing back or closing your doors for good. With 43% of cyberattacks impacting small businesses, you’re leaving your business up to the toss of a coin. 

How Does Cybersecurity Insurance Work?

Cyber insurance provides financial coverage for your business if a data breach, cyberattack, or other malicious digital activity occurs. It helps cover the costs of investigating and responding to any resulting claims from customers who are victims of these events.

Depending on your policy, it may also cover:

  • Legal defense costs
  • Business interruption costs
  • Cyber extortion payments
  • Reputation damage repair
  • Data recovery and restoration services

It’s important to note that most cyber insurance policies do not cover losses due to employee negligence, human error, or intentional acts. Identifying your risks ahead of time can help you determine the right coverage for your business. 

3 Tips for Meeting Cybersecurity Insurance Requirements

As a managed service provider (MSP), we will help you meet the cybersecurity insurance requirements so that you can get insurance and protect your business. 

Just like Progressive won’t insure your car if it’s in bad shape, your business has to be in good digital health for a provider to insure it. To make sure you’re a solid candidate for the best rates and coverage, here are 3 things you can work on before signing a policy:

1. Develop a Cybersecurity Plan

Your business should have protocols and procedures in place to address cyber threats. That includes determining the kind of data you have, where it’s stored, and how it is managed.

2. Regularly Update Software

Outdated software can create vulnerabilities, so ensure you’re keeping your systems up to date.

3. Train Staff on Cybersecurity Best Practices

Cybercrime is often the result of human error—95% of it—which means it’s important to educate employees about how to handle data and protect against cyber threats properly.

How Do You Get Cybersecurity Insurance?

The process of getting insured starts by making sure that your business meets the cybersecurity insurance requirements. Next, you need to find the right insurance provider. You should look for a company that specializes in cyber insurance and has experience working with SMBs. It’s also important to read reviews and ratings to ensure you’re working with reputable providers.

Once you’ve narrowed down your list, it’s time to start comparing policies. Make sure you know what cyber incidents are covered and understand the limits of each policy to ensure it meets your needs. It’s also important to check for any additional fees or exclusions that could limit your coverage.

Does Your Business Need Cybersecurity Insurance?

If any aspect of your business is online and could be affected by cybercrime or natural disasters, then the answer is yes. Insurance is essential for any business that collects, stores, or processes sensitive customer data online.

Get Your Best Coverage by Partnering With Forum Info-Tech

Not only will working with Forum Info-Tech help you qualify for comprehensive cyber insurance, but you’ll see all the benefits of improved security and the assurance that come along with it. We can provide advanced security measures for your business, as well as develop a comprehensive cybersecurity plan to keep you protected from future threats.

From routine maintenance to emergency support, our team is here to help you monitor and manage your digital systems so that you can focus on running your business. Schedule a free consultation today to see the benefits of better cybersecurity firsthand.