What are data breaches?
Risks to your cybersecurity can come from various sources, both inside and outside your organization. This could involve:
- Hacking: Cybercriminals with malicious intent infiltrate your computer systems to steal or exploit sensitive data.
- Phishing: Deceptive emails or websites trick unsuspecting individuals into revealing personal information or clicking on malicious links, leading to data breaches.
- Human error: Careless or unintentional actions by employees, such as clicking on phishing links or losing unencrypted devices, can expose sensitive data.
What data breach insurance typically covers
Data breach insurance covers a range of sensitive information that can be compromised in a breach:
- Personal identifiable information (names, addresses, Social Security numbers, date of birth)
- Credit card and banking information
- Health information (medical records, health insurance information)
- Employee information (payroll information, contact details)
- Confidential business information (trade secrets, proprietary business data)
- Customer data (contact information, purchase history)
In the event of data infringement or violation, data breach insurance can cover costs such as:
- Notification costs (notifying affected consumers)
- Credit monitoring services for affected individuals
- Legal fees (legal advice and representation)
- Forensic analysis (investigation of the breach)
- Public relations and crisis management
- Restoration and recovery costs (restoring data, repairing systems)
- Regulatory fines and penalties
Who needs data breach insurance?
If your business handles sensitive electronic data, such as customer information, financial records, or intellectual property, data breach insurance can protect your financial well-being and reputation. Any small business that handles digital financial transactions and sensitive data could benefit from data breach insurance.
While U.S. federal laws don’t require this insurance, strict state data protection and privacy laws make it important. Penalties for not following these laws can be financially damaging, but data breach insurance can help soften the blow.
Specific industry regulations, like Health Insurance Portability and Accountability Act (HIPAA) for healthcare and Gramm-Leach-Bliley Act (GLBA) for financial services, also demand strong data protection. They don’t directly require data breach insurance, but the heavy penalties for not complying make having this insurance a wise choice.
Your technology protected with NEXT
With NEXT you can get Cyber Insurance coverage that includes top-notch security services through our partnership with Coalition. We also cover other small business insurance options such as General Liability, Workers’ Compensation and Commercial Property.
What’s more, you get convenient 24/7 access to your plan and policies, allowing you to oversee your coverage on your own timeline effortlessly.
Begin a quote, tailor your preferences, and access your proof of insurance in approximately 10 minutes.
Start a free instant quote with NEXT.