What Is Cyber Insurance Coverage?

Most businesses use information technology (IT) some way, according to the Insurance Information Institute (III). Every day tasks for a small business, such as sending emails or selling products online, may put employee and customer's personal information at risk. If certain data is compromised, the III says that your company can be held liable — whether you are hacked, your system is infected with malware or a laptop with customer information is stolen.

If your business is found liable for a data breach of customer, partner or employee information, it's not a simple matter of making sure everything is secure again. The III says business owners may also be responsible for:

• Customer costs: Helps with expenses that affected parties incur.
• Technology expenses: Helps to have systems and computers restored or replaced.
• Notifications: May help with the costs of notifying affected parties, which is legally required in every state.
• Fines: Helps with the costs of fines your company may be required to pay.
• Legal costs: Helps to pay for any necessary legal fees.

You may want to consider purchasing cyber insurance for your business to help with these unexpected costs that can arise after data is compromised.

The III recommends taking the following steps to help reduce cyber risks:

• Maintain and update security software and hardware regularly.
• Work with an IT services provider who can assist with cyber security.
• Avoid data loss by backing up information at a secure offsite location or to a cloud service.
• Create, follow and publicly post a data privacy policy.

You may not be able to completely eliminate a cyber risk, but staying on top of changing and advancing technology can help. Knowing your business has cyber insurance protection can also give you peace of mind, because you'll have help if your data or systems are compromised.

The III recommends taking the following steps to help reduce cyber risks:

• Maintain and update security software and hardware regularly.
• Work with an IT services provider who can assist with cyber security.
• Avoid data loss by backing up information at a secure offsite location or to a cloud service.
• Create, follow and publicly post a data privacy policy.

You may not be able to completely eliminate a cyber risk, but staying on top of changing and advancing technology can help. Knowing your business has cyber insurance protection can also give you peace of mind, because you'll have help if your data or systems are compromised.