Cyber liability insurance is a necessity for safeguarding the financial health and reputation of your organization.

The Essential Role of Cyber Liability Insurance

Feb 1, 2024 | 4 minute READ

Mary in HR just asked you to update your personal paperwork through a link provided. A vendor reached out to update your payment information. An employee emailed you to change their direct deposit.

Each of these scenarios are common for a business. Yet, each one could be a phishing or ransomware attack. Are your employees trained to spot the difference? Furthermore, is your business protected against such cyber risks?

 

Understanding Cyber Liability Insurance

From businesses to nonprofit organizations, many are finding themselves the target of cyberattacks. Just as you protect your business against the risks of floods or fires, it should also include the use of technology. As AI and other technology grow so do cyber threats.

However, one way to protect your organization is through cyber liability insurance.

Cyber liability insurance is designed to support and protect organizations from Internet-based risks. It mainly includes the risks relating to information technology infrastructure and activities.

This type of insurance typically covers a range of cyber threats including data breaches, cyberattacks (such as phishing, malware, and ransomware), and other related security incidents.

 

The Risks of a Cyberattack

Did you know human error is the main cause of 95% of cybersecurity breaches? And, that the average damage from a cyberattack requires about 277 days to fix? Or, that the average global cyberattack cost is $4.45 million?

Would your business survive the lengthy recovery time and detrimental costs?

However, in 2022, IBM stated businesses who proactively assess the financial risks of potential breaches may save up to $2.1 million dollars on average. Don’t wait until it is too late to protect your business.

95% of cybersecurity breaches are human error.

It takes 277 days to recover from a cyberattack.

You risk $4.45 million in financial losses due to a cyberattack.

 

You may like: The Top Cybersecurity Predictions for 2024

 

Why Organizations and Nonprofits Need Cyber Liability Insurance

Cyber liability insurance is a necessity for safeguarding the financial health and reputation of your organization.

1. Rising Cyber Threats: With the increasing sophistication of cyberattacks, no organization is immune. Hackers often target nonprofits and smaller organizations, assuming they have weaker security measures.

2. Financial Protection: The costs associated with a data breach or cyberattack can be crippling. Cyber liability insurance helps mitigate these costs, which can include legal fees, recovery costs, and compensations for affected parties.

3. Reputation Management: A cyber incident can damage your organization’s reputation. Insurance can provide resources for public relations efforts to rebuild trust and confidence.

4. Regulatory Compliance: Many industries have regulations requiring protection of sensitive data. Noncompliance can result in hefty fines. Cyber liability insurance often includes coverage for these penalties.

5. Business Continuity: In the aftermath of a cyberattack, keeping your operations running can be challenging. Insurance can offer financial support to maintain business continuity during recovery.

6. Tailored Coverage: Policies can be customized to fit the unique needs of your organization, ensuring you’re only paying for the coverage you need.

 

Read more: 5 Reasons Your Business Can’t Afford to Ignore Cyber Insurance

 

Questions to Ask Yourself

Cyberattacks on small businesses often don’t make headlines. In spite of that, small business and nonprofits are more likely to be targeted than larger companies. Forbes reported employees of small businesses will experience 350% more social engineering attacks than their enterprise counterparts. Sadly, small businesses and nonprofits are less likely to be cyber secure – making for easy targets.

Take a moment to ask yourself the following questions.

1. What would be the immediate steps your organization would take in the event of a data breach exposing customer information?

2. How would your business recover from a ransomware attack that encrypts critical operational data?

3. Can your business afford the legal costs associated with a cyber attack, including lawsuits and regulatory fines?

4. How would you manage the reputation damage and loss of customer trust after a cyber attack?

5. What measures do you have in place to detect and respond to sophisticated phishing or social engineering attacks?

If you find yourself struggling to answer these questions, it may be a clear signal it’s time to enhance your security measures and secure cyber liability insurance.

 

The Role of TREYSTA Technology Management

At TREYSTA, we’re committed to not just providing top-notch IT solutions but also ensuring our clients are well-informed about cyber risks and protective measures. Our team can guide you in aligning your organization’s risk management strategy. Additionally, we partner with a local office to help you navigate cyber liability insurance.

Our Approach

Risk Assessment: We help identify your organization’s specific cyber risks.

Customized Recommendations: Based on the assessment, we suggest appropriate next steps for your organization. This can include partnering with a local insurance office for cyber liability insurance.

Education and Training: We offer resources and training for your staff on cybersecurity best practices. Employees play a critical role in preventing and mitigating cyber incidents.

Remember, it’s always better to be proactive rather than reactive. Let’s work together to ensure that your organization is prepared for any cyber challenges it may face. For more information or to discuss your organization’s specific needs, please don’t hesitate to contact us.

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