Are you prepared to respond if you turn on your business computers only to find that a ransomware attack has them locked down, rendering your network inaccessible unless you meet the hackers’ demands? Do you have the resources to get the system back up and running and handle the fallout? Even if you don’t pay the ransom to recover your data, you can still incur expenses that can devastate the bottom line and even put you out of business.
More companies are taking out cyber insurance policies since this nightmare is a reality for so many small and midsize businesses (research from software provider Sage reports that 48% of SMEs were the victims of cyber attacks in 2023). Insurance helps cover the costs of a cyber attack and get help with the response.
The Basics of Cyber Insurance
Cyber insurance is a business-specific policy that protects you from financial losses that arise from data breaches and cyberattacks, including ransomware. Depending on the policy, it may cover costs related to:
- Ransom payments
- Data recovery
- Legal fees
- Regulatory non-compliance fines
- Customer notification
- Business interruptions
Coverage also provides assistance with your incident response to limit damage and restore operations as quickly as possible. For example, many policies include forensic investigation services. They may cover some or all of the costs of public relations efforts to implement damage control to protect or restore your company’s reputation. Essentially, these policies are a safety net that helps you bounce back from cybersecurity incidents' financial, operational, and reputational impacts.
How to Get a Cyber Insurance Policy
Taking out a ransomware policy does not eliminate your company’s responsibility to take every precaution to protect its networks. It also doesn’t eliminate your liability in a breach that exposes sensitive data. It does, however, help you recover from an incident.
If your company has a cyber liability policy, it likely covers ransomware attacks. You can also purchase a standalone policy for these attacks; many companies in particularly vulnerable industries, like finance and healthcare, choose this option.
Most cyber insurance providers tailor coverage to clients based on their risk profiles. The amount of coverage you’ll need (and the premiums you’ll pay for it) depend on factors like:
- Your business size and annual revenue
- The existing security infrastructure
- Your critical assets
- Security incident history
- Data Sensitivity
- Geographic location
- Level of coverage
Although cyber insurance is an additional expense, it’s important to evaluate the cost of coverage against the potential damage a cyber attack can have on your company. Implementing stronger security practices and proactively addressing risks can help reduce premiums and the risk of an attack, investing in an all-around win.
Reduce the Impact of Ransomware with Insurance
Cyber insurance won’t prevent criminals from targeting your business with ransomware. Still, it can significantly reduce such an attack's impact. If you don’t have this coverage, take the first step today toward getting the support and backup you need when things go wrong.
