Have You Heard of Cybersecurity? Explore Costs, Types, Pros & Cons

Submitted by Byanka Ramos on Fri, 01/05/2024 - 08:02
A hacker on a desktop computer with a graphic overlay of a clipboard with a health guard icon

Have you ever stopped to think about how many digital transactions you make in a day? You likely check your bank account frequently, and in today's digital world, you're probably making some kind of online purchase, either for personal or business reasons. Unfortunately, at any given time, our digital assets are at risk of being exposed, stolen, or sold. That's why in this age of digital transactions and data-driven operations, the importance of cybersecurity cannot be overstated.

Businesses, regardless of their size, are facing an increasing threat of cyberattacks. Cybercriminals can target any business in any industry. In the printing industry, for instance, printer security has become a more pressing issue as printers become more connected to the internet, exposing them to cyber threats. As businesses deal with these challenges, they often ask whether cybersecurity insurance is a wise investment.

As a small company with decades of experience in the printing industry, STPT understands the significance of safeguarding a business while also keeping expenses in mind. In this article, we will elaborate on the topic of cybersecurity insurance, helping you to make an informed decision on whether it is suitable for your business.

Learn about 4 ways to protect your printer from cyberattacks.

What is Cybersecurity Insurance?

Cybersecurity insurance, often referred to as cyber insurance or cyber liability insurance, works similarly to health insurance, but for your digital assets. It's a safety net that protects your data, network infrastructure, and personal information in case of a cyberattack. This form of risk management protects against various malicious activities, including data breaches, ransomware attacks, and other cyber threats. Having cybersecurity insurance can help safeguard your business's well-being by providing financial coverage, legal safeguards, and support in the event of any cyber incident.

Here is a list of Key Coverages:

  • Legal Counsel: Comprehensive guidance and support in legal matters arising from cyber incidents.
  • Crisis Management: Strategic planning and professional assistance to manage the aftermath of a cybersecurity breach effectively.
  • Fraud Services: Robust protection against financial losses due to fraudulent activities stemming from cyber threats.
  • Data Breach Investigation: Professional services to investigate and address data breaches promptly, minimizing potential damage.
  • Recovery of Lost or Stolen Data: Dedicated efforts to recover and restore compromised data to its original state.
  • Loss of Income: Financial coverage to mitigate the economic impact during the recovery period.

How Much Does It Cost and What Drives the Cost?

Stacks of money

Like any insurance policy, the annual premiums for cybersecurity insurance can vary based on several factors, such as the coverage limits, the level of cybersecurity practices, and the risk assessment. Small to medium-sized businesses may pay annual premiums ranging from $1,000 to $7,000, while larger enterprises may face premiums of $10,000 to $25,000 or more. Businesses need to work closely with insurance providers to customize a policy that meets their specific needs and budget constraints.

Understanding the cost dynamics of cybersecurity insurance is vital for businesses considering this protective measure.

Here is a list of some factors that can affect cost:

  • Coverage Demands: The comprehensiveness of the protection you require. Think about how much cyber insurance coverage your small business might need.
  • Risk Profile: Your business's susceptibility to cyber threats, which is often influenced by industry and size.
  • Deductible Choice: The amount your business is willing to pay before the insurance coverage takes effect.
  • Industry Type: Certain sectors face higher risks due to the nature of their operations.
  • Number of Employees: The size of your workforce can impact the cost of coverage.
  • Claims History: A track record of past claims can influence the premiums you'll pay.

By understanding these factors, businesses can tailor their cybersecurity insurance to meet their specific needs while adhering to budget constraints.

Types of Cybersecurity Insurance

A man holds a tablet with a protection guard icon projecting above it

Numerous insurance companies offer different types of insurance policies with varying degrees of coverage. Which one you choose will depend on which threats are most pertinent to your business. Insurance Business has compiled a list of the top 10 cyber insurance companies in the USA based on cost and level of coverage.There are three main types of coverage:

The first type is first-party coverage, which helps businesses recover from the immediate impacts of a cyber incident, including the costs of data breach notifications, forensic investigations, and business interruption.

Second-party coverage focuses on liability for damages to others, such as legal expenses and settlements resulting from a data breach.

Third-party coverage deals with the financial repercussions of a breach, covering costs associated with customer notification, credit monitoring, and public relations efforts to mitigate reputational damage. Additionally, there are specialized policies like network security liability insurance and technology errors and omissions insurance, each tailored to address specific cyber risks.

Policies for most cyber insurances typically offer coverage ranging from 1 million to 5 million dollars, with options for per-occurrence or aggregate limits.

Understanding the nuances of these options is crucial for businesses to build a comprehensive cybersecurity insurance strategy.

Let's discuss some advantages and disadvantages in more detail.

3 Pros of Cybersecurity Insurance

Here are three reasons why your business can benefit from 

  1. Peace of Mind

Having cybersecurity insurance provides a safety net for unforeseen circumstances, offering peace of mind to business owners and stakeholders.

  1. Financial Protection

In the unfortunate event of a cyber breach, insurance offers critical financial assistance for various expenses, helping businesses recover more swiftly.

  1. Enhanced Reputation Management

Cybersecurity insurance not only protects your finances but also helps maintain a positive reputation. In the aftermath of a cyber-attack, having insurance demonstrates your commitment to security and resilience, which enhances your company's reputation among clients, partners, and stakeholders.

2 Cons of Cybersecurity Insurance

Now that we’ve got the pros out of the way, let’s note a couple of cons to getting cyber security.

  1. Cost:

While invaluable, cybersecurity insurance comes at a price, and businesses need to weigh the expense against the potential risks they face.

  1. Policy Limitations:

Understanding the scope and limitations of the policy is crucial. Businesses should thoroughly examine what is covered and assess what if any, actions are required to maintain coverage.

Each business must perform a risk assessment, determining if the premium cost aligns with its perceived risk level.

To learn about cybersecurity in your business, consider reading our blog on 5 steps to make your office cybersecure.

Why Invest in Cybersecurity Insurance?

Investing in cybersecurity insurance is a wise decision for businesses as it offers a unique value proposition. It provides a strong defense against potential threats and offers comprehensive support during challenging times. Therefore, businesses should seriously consider this investment.

Cybersecurity insurance offers a valuable source of support and assurance during uncertain times, providing a sense of comfort and security in the face of potential cyber threats. Beyond moral support, these insurance policies offer essential financial assistance to cover a spectrum of expenses arising from a cybersecurity breach. From mitigating financial losses to providing strategic support, cybersecurity insurance plays a vital role in ensuring business continuity, offering a comprehensive solution for businesses to navigate the challenges posed by cyber incidents.

Cybersecurity insurance is not just an expense, but an investment in the resilience and continuity of your business. Now that you have learned what cybersecurity insurance is, along with its advantages and disadvantages, you can make a more informed decision on whether you should invest in it for your business. Remember to consider the factors that influence the cost, how much protection your small business will require, and the amount of money you are willing to pay every month.

Keep Your Printers Secure

Printers may not seem like a major cybersecurity concern, but they can pose a significant risk to businesses if they are attacked. At STPT, we understand the importance of printers in any business, but we also know that they are vulnerable to digital attacks. With over 40 years of experience, we can provide expert guidance on how to protect your printers from these types of attacks. Learn about why old printers can also be security threats and why you should replace them.

If you would like to learn more about how to keep your printer secure, please contact us, and one of our trained printer technicians will be happy to discuss options with you.