Cyber Risk Insurance: Protect Your PC & Online Network

When we think of insurance, we usually consider the protection of physical property - cars, homes, boats, people and so on. But what about things that aren't tangible in nature, but are still viable factors in the success of your business? With technology developing at an alarming rate, it has become necessary for businesses to protect the information stored in PC's and online.

It is very possible that your current insurance policy protects your computer - the physical machine that houses all of your data. But what happens when an unknown virus crashes your entire hard drive, and you lose all the information pertaining to your business? What if you lost orders from customers and access to your inventory? Are you able to monetarily recover from such a large loss, or would you immediately be filing for bankruptcy?

Cyber risk insurance has been around for about four years, and is one of the least-utilized advantages for both small and large businesses. Most business owners don't even realize that it's an option, while others assume that data loss is covered by their current insurance policy. For years, insurance companies fought claims in court over loss of network security and over hard drive and server crashes. Now, there are provisions in regular insurance policies stating that only physical items are covered in case of fire, theft or natural disaster.

Cyber risk insurance covers the following:

1. Hacker Invasions - If someone breaks into your system and destroys, removes or tampers with files. In some case, you must have certain security devices before an insurance company will cover you for this eventuality.
2. Virus Attacks - Both known and unknown viruses are covered under this provision, and since viruses are common, this is a definite threat to the security of your network.
3. Denials-of-Service - This covers network "floods," multiple computer disconnections, user denials and service disruptions.
4. Copyright & Trademark Infringement - There are people on the Internet who steal names, ideas and copy from other websites. This protects your website from those infringements.
5. Website Content Liability - You wrote the content on your website, so it should be protected...right? If another company or individual steals your content, insurance will provide proper recourse and compensation.
6. Internet Liability - This is most commonly a threat for businesses that use other companies for web hosting, server hosting or domain hosting. If that company were to go bankrupt, having insurance will protect you from the loss.

When you research cyber insurance, you might find it listed under the following aliases:

- E-Commerce Insurance
- E-Business Insurance
- Information Security Insurance
- Cyber Insurance
- Network Security Insurance
- Hackers Insurance

Before you can buy a cyber risk insurance policy, you'll need to prepare an assessment of your current security status. Small businesses can submit this report themselves, unless they have a highly detailed system, while larger corporations will need the assessment completed by a third-party professional. At the very least, a business will need secure anti-virus, anti-spyware and firewall protection. They will also evaluate the need for security configurations, documentation of security plans, password management, and backup procedures.

The great thing about cyber risk insurance is that it can be incorporated into your current plan. To avoid duplicate insuring, carefully look over your current insurance policy to determine exactly what is already covered. Based on those results, decide what additional services you will need.

On that same note, don't insure yourself for something you don't need. For example, if you have a business that doesn't accept orders over the Internet, then don't buy insurance to cover that factor. There is no sense in paying for something that you will never use. You should also shop around with different companies, because all policies are not created equal. One company might include something like Internet liability in their standard policy, while another company might charge extra. Evaluate what is important and what is extraneous, and only buy a policy for things that might potentially warrent a claim.