July 12, 2021

Data Loss Insurance | Why You Need Data Breach Insurance in USA 2021?

Topic: Data Loss Insurance USA 2021

Video credit: The Hartford


Data Loss Insurance USA 2021

The data that you or your company collects, creates, stores or exchange is one of the most important business entities. All companies spend a significant amount of their budget to protect their data for safeguarding it from corruption and unauthorized access. They do it to prevent financial loss, consumer confidence disintegration, reputation damage, and brand erosion.

According to CNBC, the data giant, Google intends to spend more than $7 billion on data centers and data security in 2021.

The same is true for other giant data-generating sites like Facebook and Twitter.

Data has become the backbone of every business. Due to its importance, each company has a huge risk of losing data.

 

To protect against such risks, companies add data loss insurance to their business insurance policies.

In this article, you will learn what is data loss insurance. What types of attacks data loss insurance cover? Why you need data loss insurance and much more?

Let’s get started…

 

What is Data Loss Insurance?

Data Loss Insurance USA 2021


As technology is getting advanced, risks for businesses in the digital world is increasing with the same proportion.

Data is the most precious thing in this era. That’s why attackers attack your systems to steal or corrupt your data.

They can do so for ransom or damaging your business image. All these types of attacks are cyberattacks.

 

To protect against cyberattacks, companies buy different data breaches insurance plans.

Data loss insurance is similar to the property damage or injury insurance plan. For example, insurers pay you in an event of damage to your property or injury physically if you have purchased an insurance plan.

Similarly, data loss insurance will help you in case of a technology-related attack on your data.

 

In simple words, data loss insurance is a type of insurance that protects companies against damages caused by a data breach.

Data loss insurance or data breach insurance or sometimes referred to as cyber insurance. However, both are a bit different from each other.

Cyberattack is one of the reasons behind data loss. And, cyber insurance only covers cyber attack-related stuff.

However, data loss insurance covers almost all reasons for losing your data.

 

Also read: Cyber Liability Insurance for Small Business USA 2021

 

What Types of Attacks Data Loss Insurance Can Cover?

 

There are plenty of reasons behind your data loss. Therefore, you will have to get a plan according to your need.

Here are some common data breach sources you may experience:

 

Hacker Attacks

 

Cyber-attacks have become very common nowadays.

Hackers use many sophisticated methods to access or destroy your data.

Some of these methods include phishing, ransomware, malware, password attacks, and many more.

 

These attacks can be very disastrous because they can entirely damage your data by encrypting or deleting it.

Above all, these attacks are very hard to detect. Even giant companies take months to discover these attacks.

And hackers can easily accomplish their tasks what they want to do.

 

Data Theft/ Leaks

Apart from hackers, employees of your company might access sensitive data with malicious intent with or without authorization.

According to Verizon, employees are behind almost 13% of data breaches.

They steal information purposely and misuse that. They can corrupt the files and portray this event like it were a hacker attack.

 

Physical Theft / Loss of Devices

 

Cybersecurity attacks don’t include physical theft or loss of devices.

However, you can still lose your device with precious data like smartphones, laptops, and other physical storage devices.

In case of losing your devices, you are losing your precious data. Therefore, many insurers cover this type of data breach under different data loss insurance policies.

 

Human Error

 

Human error is the main cause of almost 90% of system intrusions.

Many people become a victim when they click on suspicious links or attachments in emails that can lead to a serious data breach.

Similarly, downloading software from unauthorized sites can be risky as well.

Plus, many people who use pirated software on their PCs can become easy victims. All these human errors are behind most of the system intrusions.

 

Why Do You Need Data Loss Insurance?

 

If you have some important data on your business computers, you must get data loss insurance. Why?

In the case of data loss, whatever the reason behind it, insurers will help you to pay for the losses.

The main purpose of this insurance is to protect you from financial losses and repo as well.

 

If you collect, produce, store, or share personally identifiable information (PII) or personal health information, you need data breach coverage.

Due to data loss or data breach, the reputation of your company will be at high risk.

What’d you do if you faced a cyber-attack today? You can lose millions of dollars. To avoid such losses, you need data loss insurance.

 

How Does Data Loss Insurance Work?

 

You might be thinking how does data breach insurance work? How can it protect you from financial losses?

Well, if you lose data, you will have to pay for forensic investigation, fines, and other penalties.

Further, you will have to pay for hardware and software damages. You may need to spend millions of dollars for testing the software.

 

In some cases, you might need to pay a hefty amount to the affected customers.

How will you pay this amount? Paying such a huge amount is not easy for you.

Therefore, if you have purchased a data loss insurance plan, insurers will pay on your behalf.

 

What to Consider Before Buying Data Loss Insurance?

 

There are plenty of important things to consider before getting data loss insurance. Here are some important factors:

  • Evaluate all possible aspects to know the coverage your company needs.
  • You should exactly know which policy is needed for what circumstances.
  • Work with a proficient agent to avoid any kind of mistake.
  • Get a policy by keeping current laws in mind.
  • Some companies offer a good discount based on your company’s data security reputation, you can go with that.
  • Get multiple coverages from a single company for a good discount.
  • Ask for quotes from different companies before making the final decision.
  • Data Loss Insurance USA 2021

Wrapping Up

 

Data is the most precious thing nowadays. Therefore, hackers try to steal your data for ransom all around the world.

Similarly, some companies might hire hackers to corrupt the data of their competitors.

So the chances of losing data are very high.

 

When you lose data, you might have to face severe circumstances.

You have to pay a huge amount for forensic investigation, fines, software, and hardware damages.

It might be extremely difficult for you to pay this amount. In such cases, data loss insurance is very important.

If you have purchased a data loss insurance policy, the insurance company will pay for your losses.

 

So this, concludes the topic for Data Loss Insurance USA 2021.

Also read: Types of Cyber Insurances

Cybersecurity, Cybersecurity Insurance
About Shuvankar

Leave a Reply

Your email address will not be published. Required fields are marked *