Ensure Your Business Meets Cyber-Liability Insurance Requirements.
Did you know that 48% of cyber insurance claims are denied because businesses fail to meet policy requirements? Cyber-liability insurance is your safety net against the devastating costs of cyberattacks, but only if you’re properly covered and compliant.
Common pitfalls with cyber-liability insurance:
- Inadequate Coverage: A study found that 80% of insured companies experiencing a data breach had insufficient cyber insurance, with an average coverage gap of 350%.
- Lack of Cyber Insurance: Approximately 62% of organizations lack cyber insurance, often due to perceptions that coverage is not a priority or budget constraints.
- Small Business Coverage: Only 20% of small businesses have cyber insurance, despite 28% of data breaches targeting this segment.
Cyber-liability insurance is designed to protect businesses from financial losses due to cyber incidents, including data breaches, ransomware, and other digital threats.
Here’s why it’s essential:
- Rising Cyber Threats: Every business is a target, and no one is immune.
- Regulatory Compliance: Many industries now require cyber-liability insurance as a baseline protection.
- Comprehensive Protection: Coverage can include legal fees, customer notification, public relations efforts, and even ransom payments.
- An Ounce of Prevention: Over 60% of businesses that suffer a data breach or other major cybersecurity event, close their doors within 6 months.
Contact G6 and Speak To One Of Our Experts.
The Cost of Non-Compliance
Failing to meet your cyber-insurance policy requirements can have catastrophic consequences:
- 48% of small businesses’ claims are denied due to non-compliance.
- One out of four businesses falsely claim they meet the required security controls.
The Average Cost of a Cyber Incident: $4.45 million globally as of 2024
- Notification of affected parties: $180 per record.
- Legal defense costs: $150,000 on average.
- Downtime costs: $50,000 per day.
- Ransom payments: Median demand of $130,000.
Common Policy Types
Not all cyber insurance is created equal. Do you know the difference between a cyber-insurance rider and a standalone policy and the pros and cons of each?
Cyber Rider on a Professional Liability Policy:
- Pro: Cost-effective, basic protection for small risks.
- Pro: Bundling cyber coverage with existing liability insurance simplifies policy management and reduces administrative burdens.
- Con: Limited scope often excludes regulatory fines and advanced threats.
- Con: No dedicated support services. Unlike standalone policies, riders often don’t include breach response teams or post-incident support.
- Con: Risk of Underinsurance. May leave significant gaps in coverage, particularly for businesses with higher exposure to cyber threats.
Standalone Cyber Insurance Policy:
- Pro: Comprehensive coverage, including breach response services and forensics.
- Pro: Offers broader protection, covering a variety of cyber risks such as ransomware, data breaches, regulatory fines, and post-incident costs (e.g., forensics, legal fees).
- Con: Higher costs, requires stricter compliance.
- Con: Could duplicate coverage included in other policies if not reviewed carefully.
Choosing The Right Insurance
Quantify Risk
First step is to understand what a breach could cost your company. How much would it cost your business to be down per day in lost productivity and sales? How much are your assets worth and the value of the data you store, transmit and process?
Identify Drivers
What outside drivers are establishing the need for insurance and protection of your tangible and digital assets? This could be regulatory compliance such as CMMC, ISO, FTC Safeguards, etc. This could also be federal/state or Industry regulations.
Consult Experts
Once you have a better idea of your exposure and risk, you can consult with a cyber-liability insurance provider and tailor your policy to your liability. Right sizing the policy will ensure you can recover from an incident and its associated losses.
Schedule a Free 30-minute Cyber-Insurance Review
Schedule meeting with the experts at G6 to help review your risk and determine if your insurance is suitable and discuss the requirements of your policy to ensure they're being met.