What SMBs Need to Know About 'Cyber Insurance'

Cyber insurance protects SMBs from costs your company incurs due to cyberattack. While cyber insurance can help mitigate some of the risks of cyberattacks, it’s not a silver bullet for cybersecurity and obtaining and maintaining cyber insurance coverage requires some level of cybersecurity protection.

Here are eight things you need to know about cyber insurance and an option of why you should consider TPx.

Third-Party Cyber Insurance Covers Breaches on Other Organizations’ Networks:

Cyberattacks are on the rise, with ransomware-related data breaches having doubled in each of the past two years, according to Identity Theft Resource Center’s (ITRC) 2021 Annual Data Breach Report. 43% of attacks are aimed at SMBs, but only 14% are prepared to defend themselves. Your business should consider acquiring cyber insurance; a single cyberattack costs companies of all sizes an average of $200,000. Getting reimbursed for damages incurred if you’re breached can be vital to financial recovery

Obtain Cyber Insurance, You Need to Implement Cyber Defenses:

You can purchase cybersecurity insurance through most business insurance providers, but cyber insurers consider organizations with poor security practices as an unwanted, and potentially dangerous, liability to their business model. Improving your cyber defenses will improve your chance of qualifying for cyber insurance coverage, as well as obtaining the best rates.

Cyber Insurance Benefits Businesses of All Sizes:

Your business isn’t too small to be a target of cyberattack. According to Hiscox, an international cyber insurer, 23% of small businesses suffered at least one cyberattack in the past year. If you handle or use digital information, you need to mitigate your cyber risks and protect your company, your employees and your customers. In fact, 99% of all cybersecurity insurance claims come from small to medium-sized enterprises (SMEs). According to a 2023 Cyber Claims Study, the average cybersecurity insurance claim cost for a small to medium enterprise is $345,000.

Cyber Insurance Varies, But Typically Covers Six Key Areas:

Cyber Insurance is as dynamic as the companies it protects and is consequently far from standardized.

However, some things that it typically covers include:

First-Party Cyber Insurance Covers Breaches on Your Own Network:

First-party cyber liability insurance addresses the financial fallout associated with cybersecurity breaches on your own network and can include:

Third-Party Cyber Insurance Covers Breaches on Other Organizations’ Networks:

Third party coverage helps pay for lawsuits caused by data breaches on clients’, vendors’, regulatory bodies’, service providers’ and other organizations’ network systems and can cover.

Cyber Insurance Requires Security Controls:

Insurance providers can deny coverage to companies that do not meet minimum standards to prepare for and defend against cyber threats. Specific standards may vary slightly by provider, but typically four types of security controls are required:

Get Help from an MSP Like TPx with Your Cyber Insurance Needs TPx provides key solutions that cyber insurance companies look for before approving businesses for coverage:

Consider TPx SMBs like to choose TPx to meet their cybersecurity needs because:

TPx - 9 Things SMBs Need to Know About Cyber Insurance - PDF

Please reach out to me directly to discuss scheduling a Complimentary Security Assessment as well: [email protected]