Get insurance to protect your business from cyber attacks

Justin Stoltzfus

In the 21st century, preparing for cybercrime is just part of the cost of doing business. As governments around the world scramble to protect their own IT assets against "cyberwars" and sometimes initiate similar offensive measures), business leaders in the private sector are worrying about legions of unaffiliated hackers who can attack from the comfort of their living rooms.

Threats can come from individual "rogue operators," employees, independent contractors or anyone with access to company data. The treasure? Networks, servers and hardware assets, as well as another kind of "modern gold" -- client data. Because many businesses keep their customers' financial information in databases, the technology costumers take security for granted can allow their credit card numbers and other sensitive information to end up in the wrong hands.

One type of business insurance addresses these concerns: network security and privacy liability coverage. Such policies are available from AIG, Chubb and a variety of specialty insurers, and coverage usually be added as a rider to an existing business insurance policy. According to Small Business Review, annual premiums typically are $3,500 for $1 million in coverage with a $5,000 deductible). Cyber security insurance may cover:

  • Costs from lost business or downtime.
  • Costs of replacing hardware or reinstalling software.
  • Cyber extortion costs payments to hackers demanding money to stop an attack).
  • Costs of regulatory actions after a security breach.
  • Crisis management costs.
  • Costs related to the investigation of cyberattacks.
  • "Denial of service" attack or Internet disruption coverage.

Business insurance provider Chartis offers a policy called netAdvantage, which covers many of the costly details associated with the aftermath of an Internet security breach. In addition to covering the cost of alerting customers to the fact that their information has been compromised, it also pays for providing credit-monitoring services to affected customers.

Whether it's a stolen laptop or a compromised server, an unhappy worker or an outside hacker, cyberattacks can cost companies boatloads of money from lost business, interruption of operations and regulatory actions, as well as class-action suits when customers sue for identity theft damages.

See how much you could save today on your insurance. Get your free business insurance quotes today!