Cyber Insurance vs. Data Breach Insurance: What’s the Difference?
If you are concerned about protecting your company’s virtual assets, having the right insurance policy can provide immense peace of mind. However, you may be unsure whether there is a difference between cyber insurance and data breach insurance. Which is best for you, or does your company need both types?
In a nutshell, cyber insurance offers all of the coverage of a data breach policy, plus more. Explore the differences between these policies, then discover cyber insurance for law firms from Gilsbar.
Exploring the Differences Between the Two Policies
While many companies distinguish between cyber and data breach policies, these two types of coverage can overlap slightly. Always look closely at the details and coverage terms for a policy you are interested in purchasing. This guide provides a general overview of what each type of plan often covers.
What Does Cyber Insurance Cover?
Cyber insurance offers comprehensive coverage against cyberattacks, safeguarding you against monetary losses and legal issues stemming from a virtual attack. Many policies include distinct first-party vs. third-party coverage.
First-party coverage protects your business against the financial losses you experience from a cyberattack, such as:
- Lost revenue
- Business interruption losses
- Investigation costs
- Credit monitoring and public relations expenses
Meanwhile, third-party coverage pays for costs related to liability issues from an attack, such as attorney fees, regulatory fines, and legal costs.
Cyber extortion and ransomware are two common issues these policies protect against. If any unauthorized parties gain access to your private information and cost you money, a cyber insurance policy should provide protection.
What Does Data Breach Insurance Cover?
You may think that the distinction between these policies comes from the definition of a cyber attack vs. a data breach. However, a data breach is simply one type of virtual attack your company may face.
Instead, the main difference between cyber insurance and data breach insurance is liability coverage. The former protects you against lawsuits related to cyberattacks, while the latter does not. Data breach plans, therefore, primarily offer first-party coverage. They can pay for the direct expenses you incur from a cybercrime, such as lost revenue while your business is closed or the costs to notify customers about the incident.
Every state in the U.S. now has data breach notification laws, which require you to disclose details of the cyberattack to relevant parties. If any customers, employees, or other parties had personally identifiable information that was retrieved in the breach, you must let them know.
Some parties may attempt legal action against your business after you notify them. However, because data breach policies typically do not account for liability, you would need to pay legal fees out of pocket. Alternatively, you may have another liability policy that covers this situation.
Which Is Right for Your Business?
When comparing cyber insurance and data breach insurance, you will discover that the former offers much more comprehensive coverage. However, you may not need this level of protection if your business has other liability policies that would protect you in the event of a cyberattack.
The best way to determine the right policy for your business is to meet with an agent. They can evaluate your existing policies, identify gaps, and explain the different policies available to you. They can also walk you through variables like premiums and coverage limits, helping you find an affordable policy that thoroughly protects your company.
Let Gilsbar Safeguard Your Company Against Cyberattacks
Which is right for your company: cyber insurance or data breach insurance? Gilsbar can answer this question while providing tailored guidance to protect your business.
We offer a wide range of policy options for companies across the U.S. and can help you pinpoint the right solutions based on your budget, business risks, and goals.
Allow us to be your strategic partners in the often confusing world of business protection. Contact us today to get a quote, then learn about reducing data exposure in the workplace.