With the increase of cyber threats for companies of all sizes, risk management programs are highly recommended for a business that operates in the area of IT or technology. IT companies have the most exposure since they usually manage massive amounts of customer data, and there are special insurance policies written to help protect against these risks, such as data breach insurance. However, as advised by the experts at https://www.axisins.com/, whether an IT or non-IT company, every company should consider a cyber risk insurance policy.
Two Types of Cyber Risk
Since there are different cybersecurity threats based on the nature of your company’s operations, there are two types of cyber risk insurance. There are considered first and third party cyber insurance policies.
- First-Party. This is insurance that non-IT firm usually needs, as it can cover the risks they face. The benefits usually include funds for notifying clients that information was compromised or exposed, purchasing credit monitoring services for affected customers, paying for public relations restorations, paying for ransomware attacks, and replenishing lost business income.
- Third-Party. This coverage is for businesses and people who manage the systems where the breach was allowed to occur. Independent contractors, tech companies, or IT companies are the ones who need this coverage. These entities were responsible for the safekeeping of the data.
Cybersecurity is an area of risk that continues to grow. Knowing what coverage you need helps you create the most effective financial defenses against cyber threats.