Be Careful of Loopholes in Cybersecurity Insurance Policies

As you have noticed in the past years, major data breaches and ransomware have affected businesses locally and all over the world. If you are considering cybersecurity insurance to protect your company from costly damages and lawsuits due to a cyber-attack, this post will be useful for you.

Understanding How Cybersecurity Insurance Works

Cybersecurity insurance can often times be compared to your car warranty. When you by a car, it comes with a warranty. Essentially, a car warranty is a contract between you and the company that built your car. The company will make any repairs necessary as long as you uphold your end of the contract. Part of that contract is regular maintenance. A car manufacturer will refuse to service your car if it has been neglected.

Your Role in Cybersecurity Insurance

Here are the things you need to do in order to receive help from your cybersecurity insurance company when something happens:

  • Your IT team needs to keep systems patched and up to date or outsource this task to professional so your team can focus on more important tasks
  • Take active measures to prevent ransomware and other cybercrime attacks
  • Backing up your company’s data

If any of these tasks are not done, it can be grounds for your cybersecurity insurance company to refuse to help you. Here’s a real-life excerpt from a policy, “arising out of or resulting from the failure to, within a reasonable period of time, install customary software product updates and releases, or apply customary security-related software patches, to computers and other components of computer systems.” If your cybersecurity insurance policy has something like this, you will only be able to collect if you take reasonable measures to prevent a cyber attack in the first place.

Don’t Stop After Signing the Cybersecurity Insurance Policy

Signing the insurance policy doesn’t mean you should stop being proactive and finding new ways to protect your data. The insurance policy only covers financial losses due to a cyber attack. It does not protect the damage done to your brand and the loss of trust of your clients and/or employees if a data breach were to happen.

In the end, if you are already doing all of these tasks and have the process tested and documented, then Cybersecurity Insurance may be a good fit for you. However, since you are already doing these tasks, the likelihood of a cyber attack happening is very slim. If your company is not sure if systems are being updated and backed up, call Business Data Services at 913-239-0368 to see if you qualify for a Free Network Assessment or visit http://bdsnow.com/free-assessment/.

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