Data breaches and network security failures affect hundreds of businesses each year, and along with reputational concerns, the financial repercussions can be damaging.
A study from IBM revealed the average consolidated total cost of a data breach is $3.8 million — a 23% increase since 2013. With data breaches and network security failures costing companies an all time high, the case for cyber insurance is stronger than ever.
While cyber insurance won’t get your company completely out of the woods in terms of recovering from a security issue, it can help your business recover financially in some major ways. Here’s a look at how cyber insurance can help your business bounce back after a data breach or network security failure:
What situations does cyber insurance cover?
Typically, cyber insurance policies are made up of situations regarding errors and omissions, network security, privacy and media liability.
Errors and omissions refers to negligence or errors made in the performance of your company’s services, ranging from technological to professional, while consumer data breaches, unauthorized access, virus transmission, cyber extortion, and the destruction of data all fall under the category of network security.
Other common causes of data breach from physical data as well as human error are often covered under the area of privacy. Examples of covered privacy violations include a lost or stolen laptop, improper disposal of records, or sensitive information emailed to the wrong recipient. The final category, media liability, generally includes libel, slander, intellectual property and copyright infringement.
Together, these four categories give businesses a broad range of coverage for dealing with most instances of data breaches and exposures.
What are the financial benefits of cyber insurance?
Privacy and network security issues can incur many costs to your business as it navigates the path to recovery. Often when issues of unauthorized data exposure, virus transmission, data destruction, or stolen devices occur, multiple parties need to be involved to repair the violations. Often, lawyers, forensic investigators and public relations teams need to get involved to patch the failure and mitigate further damage.
Luckily for businesses, cyber insurance covers both first party and third party costs when these situations arise.
Some common first-party costs include:
- Legal advice to determine your company’s communications and regulatory obligations
- Forensic investigation of the breach
- Extra expenses incurred while your network is down, including loss of profits
- Providing credit monitoring to affected customers
- Public relations expenses to minimize damage, and the costs of communicating the breach
Financial coverage can also extend to third party costs, which often include settlements, damages, regulatory fines, legal defense and more.
What holes are left to fill?
While cyber insurance can help your business bounce back financially after a data breach, it can’t help you recover any lost or stolen data. A study from IBM revealed the cost incurred for each lost or stolen record containing sensitive and confidential information increased six percent from a consolidated average of $145 to $154 since 2013.
Because of this, your business should have a plan that allows it to minimize the expenses of lost or stolen data, and to ensure as little downtime as possible with the assistance of quick data recovery solutions.
Cloud backup is the perfect solution for any business that wants the ability to quickly recover lost or stolen, along with previous file versions of its data. When data is lost, stolen, or accidentally changed, cloud backup allows you to recover the information you need with as little downtime as possible — even if it means recovering every file in your system.
Cloud backup creates a complete backup of all of your data, and refreshes this backup continuously so that every change is saved and retraceable should you ever need to recover it. That means if your company’s system is ever infected with a virus that encrypts or deletes your data, an employee makes irrevocable errors within your records, or your devices undergo physical damage rendering them unusable, you’ll always be able to recover and restore the data you need to get you back up and running in no time.
Nordic Backup specializes in helping businesses institute cloud backup solutions that will help them successfully and quickly recover data during any data loss situation. Our cloud backup solutions run continuously and quietly in the background, creating complete backups of all the information you need without disturbing you or your employees while you work. Find a cloud backup plan that fits your business perfectly and solves the data discrepancies that cyber insurance can’t. Your business will thank you for it.
