Cyber Insurance for Non-Profits: How Does Cyber Liability Insurance Work?
As technological advancements continue to shape our lives, so does the prevalence of cybercrime. 47% of businesses have experienced a cyberattack in 2022. And they may be even costlier to recover from.
Unfortunately, non-profit organizations might not be immune to these threats. As such, cyber insurance for non-profits can help protect them from financial risks. However, purchasing cyber-risk insurance can be overwhelming without a solid understanding.
This quick guide can walk you through cyber coverage and explain how it works. We'll delve into what it can cover and what it doesn't.
The Importance of Helping to Prevent Non-Profit Cyber Attacks
Unfortunately, non-profits might not be immune to cyber-attacks. Because it serves a good cause doesn't mean it's not vulnerable to threats.
What kinds of threats are we talking about? Nowadays, there are four common types of cyber-attacks that non-profit organizations should watch out for:
- Malware
- Phishing
- Password attacks
- Denial of service (DoS)
Malware is a program that can harm your computer system or network. Phishing attempts can trick people into revealing sensitive information.
Password attacks try to crack and steal your password. A DoS attack aims to make a service unusable by overwhelming traffic.
Unfortunately, these attacks can result in significant financial losses. Often more harmful in the long run, it can also damage the organization's reputation.
That's why it can be essential to prioritize preventative measures for cyber incidents and risks. To help prevent cyber-attacks, your team should consider implementing security measures such as:
- Installing firewalls and antivirus software
- Regularly backing up data
- Conducting regular employee training on spotting and avoiding cyber-attacks
The cost of a single cyber-attack can be devastating to an organization. Consequences can include:
- Staff reductions
- Decreased operational capacity
- Loss of donor trust
Cyber liability insurance can help mitigate the consequences of a cyber-attack.
What is Cyber Liability Insurance?
Cyber liability insurance is a policy that can help protect businesses and organizations from financial loss due to cyber threats. It can cover most cyber risks, such as data breaches, ransomware attacks, and extortion.
This type of coverage typically helps to cover the costs associated with a cyber-attack, including:
- Forensic investigations
- Legal fees
- Notifying clients of a data breach
Often, it can help cover the expenses associated with investigating data and systems damaged or destroyed in a cyber-attack.
Without cyber liability coverage, your non-profit could face significant financial losses. Reputational damage and operational disruptions are concerns, too. A cyber liability insurance policy can help mitigate these risks and provide "peace of mind" knowing you could be protected.
What's Not Covered by Cyber Insurance for Non-Profits?
Even though cyber liability insurance can help, it doesn't mean every possible eventuality is included. Here are some things that typically might not be covered by cyber insurance for non-profits.
Property Loss
Cyber insurance doesn't cover physical property loss, such as damage to furniture or equipment. You'll need to purchase property insurance to help protect your non-profit from property losses.
Bodily Injury or Property Damage
Cyber liability insurance doesn't cover bodily injury or property damage for third parties. For example, let's say a vendor is visiting your business and you damage their belongings, cyber coverage won't cover the expenses to repair or replace their items.
Or perhaps the vendor slips and falls, suffering an injury. You may need a different type of coverage to help cover their medical expenses like general liability coverage.
Cyber Liability Insurance Cost
Now that you know what cyber liability insurance is, one question remains. How much does it cost?
A few factors can affect the cost of your cyber liability insurance policy.
The coverage limits you choose usually impact your premium. The higher the limit, the more protection you have, but your policy can be more expensive.
Your claims history can also play a role, too. If you've had past cyber incidents, your premium may be higher.
Overall, cyber liability insurance can be affordable if you choose the right coverage and work to improve your data security. It can be more affordable if you bundle it with other coverages, like general liability and property coverage.
Get an Insurance Quote
In today's digital world, cyber-attacks are a real threat that can impact your non-profit. That's why cyber coverage can be a good idea for many organizations that operate online.
With cyber liability insurance, you can have "peace of mind" knowing you could be protected from data breaches, cyber threats, and other losses resulting from cyber-attacks.
At PolicySweet®, we offer a Business Owners Policy. It bundles cyber insurance, general liability, and property insurance.
This comprehensive coverage helps to ensure that your non-profit can be protected against unexpected losses. Contact us today to learn more or to request a quote for a BOP policy.