Today, cyber threat risks are ever-increasing with incidences of hacking and loss of confidential data happening all the time. Hackers have highly innovative methods for accessing confidential data from companies and even individuals. In an era of rising cyber threats, many companies are ramping up security efforts and are turning to insurance companies as a way to protect their information from data breaches.
There is no company which can say with full certainty that they are free from cyber risks, as hackers are continuously looking for new ways to steal confidential information. Data breach insurance can add a solid layer of security to a company’s sensitive data. These are tips which you need to have at hand when looking to invest in this kind of insurance.
1. Type of Coverage
There are two categories of coverage which a company needs to invest in to enhance the security of their data. There is first-party coverage and third-party coverage. The first-party coverage insurance protects the policyholder’s own data or the company data from damage or loss. This means the coverage will cover the software if damaged and the data can no longer be used. The third-party insurance, on the other hand, protects the company or the policyholder from liabilities in the form of a lawsuit or claim, which can be made by a third party.
2. Cost of Data Restoration
Another very important consideration that needs to be made is whether there is a cost for data restoration. You need to find out whether the company you are purchasing the policy from covers the cost you may incur for restoring hard drive data or other forms of stored data. There are companies that will not cover the charges incurred in upgrading or maintaining the system and will charge the customer, so you need to know about them.
3. Ensure That the Third Party Is Insured
When looking to invest in data breach insurance, it’s important to first determine if the third party will be in any way controlling some of the customer data. They have to detail ways in which this will be done. The third party, which your customer data is accessed through, must be insured against the same thing they are insuring you from.
4. Regulatory Actions
Another very important consideration that you need to make is whether your insurance company will cover any regulatory actions that may be brought against the company. This means that the policy needs to go past just the coverage of the loss of information, but also cover regulatory actions.
5. Coverage of Unencrypted Devices
Many people are using unencrypted devices in the forms of personal laptops, tablets and even smartphones. It is important to first find out if the policy you take will cover those devices. Most companies will not cover unencrypted devices because of the risks which they pose. The insurance company will cover company-based computers and devices which are encrypted, as a way to reduce the liability risks for the company.
