What Happens If You Don’t Have Cyber Insurance During a Data Breach? 

Businesses often require a multitude of insurance policies to address relevant risks and exposures. Lacking essential coverage could expose even the most responsibly run companies to potentially devastating financial losses. In the digital era, where cyberattacks and data breaches have become prevalent threats, cyber insurance is often essential. Failing to understand or respect the importance of these policies could have dire ramifications.

3 Ways Lacking Cyber Coverage Might Hurt Your Company

There’s no shortage of potential consequences for uninsured businesses attempting to navigate a data breach or other cyber incident. Consider the following possibilities and how not having cyber insurance might exacerbate an already difficult situation:

• Exorbitant legal fees—In the wake of a data breach, affected parties might file a lawsuit against your business, alleging that you were responsible for their information being compromised. In such situations, lacking cyber coverage would mean you’d have to pay for attorney fees, settlements, judgments and other losses out of pocket.

• Unrecoverable projected revenue—Cyber insurance may offer financial aid if a data breach or other cyber incident disrupts or delays your normal operations. For example, if you’re forced to shut down servers or networks due to a breach, your policy might compensate you for income you would have otherwise earned. But without coverage, you might have no way of recovering this revenue.

• Reputational harm—After a data breach, your company might make headlines for an unfortunate reason. Even if the general public is not fully aware of an incident, you might lose the trust of affected clients and customers. Cyber insurance could potentially have helped with hiring a public relations firm and rehabilitating your reputation, but if you chose not to secure coverage, you might lack the means to restore your good name and credibility.

We’re Here to Help

Contact Thornburg Insurance Agency in Huntington, WV today to discuss your cyber insurance needs and identify an appropriate policy.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.