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Monday, September 2, 2019

TYPES OF CYBER INSURANCE AND WHY YOU NEED THEM

The growing advent of technology has come as a boon as well as a bane. It is a blessing because it promotes a strong sense of networking which helps every small scale business. On the other hand, it is a bane because of the rapid increase in the rates of cyber crimes which has made several lives miserable. While as a blessing technology works just fine for us, technology as a curse needs to be addressed immediately. In order to keep you secured from the banes of technology, insurance companies have availed the options of cyber insurance for its customers.


In order to understand cyber insurance, it is important to know the types of cyber insurance claims, first. Therefore, take a look at these types given below for a piece of better knowledge about this policy:

What are the types of cyber insurance?

Typically, the categorization of a cyber insurance policy depends on different forms and multiple criteria. For instance, one can categorize it based on numerous factors like the coverage, risks, locality, and so forth. However, the insurance companies usually provide the policyholders with the following types mentioned below. Take a look:

  1. First-party
Under this category, it directly provides coverage to people who have faced the following incidents like online theft, data destruction, extortion, hacking, accidental or deliberate denial of service.

  1. Liability coverage
Under this category, the coverage is provided to those people who have been stuck in a situation caused by others. It covers situations like data breaches, omissions errors and commissions, defamation related to negative publicity, business secrets or data theft, and so forth.

  1. General Benefits
Under this category, the coverage provides benefits related to being in control of complete and valid cyber insurance policy. The benefits covered in this policy are public relation initiatives, post-incident management, criminal reward funds, structured and planned security audits, major investigations and reports.

Why do you need it?

The main purpose of cyber insurance is to help the policyholders to recover from either the breach of data or identity by reducing the costs incurred in the aftermath. Being a sub-category of general insurance, a cyber insurance policy covers all the businesses and individuals from the risks and liabilities of the internet. Additionally, the coverage may extend in the case of circumstances of forensic investigation, business interruption, extortion, and so forth.

Apart from these, go through these few other reasons that specify the need for cyber insurance for you and your organization. Take a look:

  1. General liability insurance fails to cover cybercrimes
If you are in the assumption that your general liability insurance will incur the losses caused due to the internet, then you’re wrong. In order to protect your business from cyber crimes or cyber attacks, purchase a cyber insurance policy. Opting for cyber insurance means securing your business from the first and third party losses as well as from the loss of any profits due to a breach.

  1. Cyber insurance is an affordable solution
Surprisingly, investing in cyber insurance is an affordable solution for your humongous business. This is simply because the pricing structure of the policy is dependant upon the size of your company, assets, and the requirement for the coverage. While the premiums can be deducted if your company practices strong cybersecurity, the cyber insurance claims are lowered every year in case none are made.

  1. Cyber insurance facilitates proper management of risks
While big businesses might have a large risk management team, small business doesn’t usually have any strong team for risk management. When you opt for cyber insurance, you will eventually fill in the gap in risk management. Cyber insurance builds a firewall which helps these small scale businesses to keep their business protected from risk pertaining to cyber attacks.

Now that you know the significance of cyber insurance in the lives of every entrepreneur, what are waiting for? Since cyber insurance is strictly an area of specialization, take professional help for investment in the same. A qualified expert will not only asses the limitation of your current general business liability insurance but also pick a cyber insurance plan which bridges as required for your business.

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