With how much we’ve intertwined technology into our daily lives, all businesses must be ready to face the threats our digital world poses. One key piece of your cyber defense tactics is cyber insurance.
What is cyber insurance?
On a broad scale, cyber insurance is designed to protect your business from risks and losses associated with data breaches and cyber-attacks. However, it’s important to know there are two types of cyber insurance in Texas, and both protect against different risks.
- First-Party Cyber Liability offers financial protection for expenses your business faces after a data breach. Some examples of covered losses include ransom requests, hardware and software expenses, and interruption of business operations.
- Third-Party Cyber Liability protects your business if one of your clients suffers losses from your data breach and decides to file a lawsuit. Examples of covered losses include penalties assessed by regulatory agencies and accidentally exposing your clients’ or employees’ personal information.
Do small businesses need cyber insurance?
To keep it concise, cyber insurance is strongly recommended for businesses of all sizes in Texas—including small ones.
If you’d like more reasoning, look at it like this. Every day, countless amounts of sensitive data are shared with businesses, vendors, companies, social media sites, and so on. Much of that information is then stored. If your business has internet access and stores any data, you’re vulnerable to a Texas cyber-attack.
This vulnerability holds especially true for small businesses. As a small business, you probably have fewer security protocols and defenses than a large, national business would. Unfortunately, this makes you an easier target.
In a cybercrime study by Accenture, researchers found that nearly 43% of cyber-attacks target small-to-medium businesses, and this percentage continues to climb. In addition, the cost of cybersecurity incidences isn’t predictable, with averages ranging from $826 to $653,587.
Navigating the challenges of finding cyber insurance.
Unfortunately, with the recent increase in the number and severity of cyber-attacks, finding and qualifying for cyber insurance has become more difficult. Insurance companies have become more selective when offering Texas cyber insurance policies and will often require applicants to complete a cyber risk assessment.
To help you understand what you could expect, here are some examples of tactics you may see on a cyber risk assessment:
- Company network must have a firewall in place.
- Business data is regularly backed up to either an external media device or the cloud.
- Employees have completed cybersecurity training and have a firm knowledge of security policy.
- Employee and business accounts are protected with multi-factor authentication.
- Use central patch management to update software promptly.
This list of examples is not extensive and will likely vary from insurer to insurer. The takeaway here is ensuring your business is doing everything it feasibly can to keep itself and your potential insurer safe from digital threats.
Why you should work with an independent agent to find cyber insurance.
In all honesty, it’s tough to purchase cyber insurance right now. Balancing existing safety measures, incorporating new ones, doing industry research, and trying to represent yourself in the best light to insurers are all big tasks on their own. Doing them all at the same time? Yeesh.
When you work with an independent insurance agent in Texas, you have someone with your best interest in mind, not an insurance company’s. They will likely better understand what you’ll need to qualify for a cyber insurance policy and can present you to insurance companies in the best light possible.
We have multiple agents on staff, ready to help you find a cyber insurance policy and peace of mind as soon as possible. Contact us today!
