Cyberattacks and data breaches are expensive and becoming increasingly common. Organizations often have weak cybersecurity, which makes them an attractive target.
Last year, the total damage was $6 trillion and cyberattacks have become the fastest growing crime in the U.S. and nonprofits are not an exception. They are frequently targeted due to the fact that these organizations often rely on free software and inexpensive web hosting.
But how can you protect your organization from these attacks and how much will it cost you?
Keep reading to find out.
Why Do You Need Cyber Insurance Coverage?
Cyberattacks are expected to cost the world $10.5 Trillion annually by 2025 according to Cyber Magazine!
In fact, on average, 30,000 websites are hacked daily. A cyberattack isn’t just an inconvenience, it can put you out of business.
Many nonprofits collect and store sensitive personal information that is protected by law as confidential. When there is a breach of the confidentiality of their data, that poses a risk for the individuals whose data was disclosed as well as nonprofits that will now potentially be subject to liability for the breach.
Cyber insurance coverage helps your organization recover from financial losses caused by cyberattacks and data breaches. It can pay for credit monitoring, attorney’s fees, fines, and other costly expenses.
Top 4 Common Types of Cybersecurity Attacks
Let’s take a deeper look at the most common types of Cybersecurity attacks today.
The four most common types include:
- Malware: It includes various types of attacks like spyware, viruses, and worms.
- Phishing: They are attacks that are extremely common and involve sending mass amounts of fraudulent emails to unsuspecting users, disguised as coming from a reliable source.
- Password Attacks: By accessing a person’s password, an attacker can gain entry to confidential or critical data and systems, including the ability to manipulate and control said data/systems.
- Denial of Service: It is a type of cyber attack that floods a computer or network so it can’t respond to requests.
Protecting your nonprofit from these attacks will save you thousands of dollars if not more in unexpected losses.
What Is Cyber Liability Insurance?
Cyber liability is insurance coverage for liability that arises out of unauthorized use of or access to protected data within your organization.
Cyber liability insurance protects nonprofits from the high costs of a data breach or malicious software attack. It covers expenses such as notifying your donors, paying for your credit monitoring, attorney’s fees, fines, and other costly expenses.
Cyber liability insurance can address both the first and third-party risks associated with protected data.
Cyber Liability Policies
- Cyber liability policies also provide coverage for liability claims for:
- Spreading a virus or malicious code
- Computer theft
Additionally, it covers any unintentional act, mistake, error, or omission made by your employees while performing their job.
H3: Cyber Liability Insurance Coverage
The typical business insurance policy only covers “tangible” assets, and electronic data is not considered tangible under the typical policy definition. Cyber liability insurance fills that gap and can go even further.
Most components of coverage can address issues after a cyber event, which includes, but is not limited to:
- Costs to notify those individuals impacted by the cyber event, including notice required by law, and public relations expenses.
- Cost to respond to an extortion demand including reimbursement for ransom amounts paid.
Some components of coverage address issues before a cyber event happens such as breach pre-preparedness services.
H3: What Is Covered?
It is very important for every nonprofit to be aware of what is included in the Cyber Liability Insurance Policy.
Here are the most common ones:
This category includes costs that organizations would ordinarily have to pay to mitigate losses related to a data breach or privacy incident.
- Examples of first-party expenses are:
- Incident response and digital forensics services
- PR services to manage reputational damage caused by a breach
- Notification to affected parties
- Other expenses involved indirectly responding to a cyber incident
As you can see this category is a must in any cyber liability insurance policy.
This category covers costs associated with defending liability claims and/or fines and penalties assessed by regulating authorities. Examples include legal fees to defend lawsuits against the company and fines for violating HIPAA regulations.
Cyber Crime Costs
This category deals with financial losses resulting directly from criminal activity. An example is the theft of funds as a result of digital fraud.
What Is Not Covered?
While cyber liability insurance provides financial protection for organizations with respect to their digital assets, it doesn’t cover every possible risk and cost. Some things a typical cyber liability insurance policy might exclude are
Upgrades: If you suffer a data breach and decide to upgrade your systems afterward to prevent future incidents, your policy may not cover the upgrades.
Future Profits: Cyber policies don’t usually cover potential future profits that may be lost due to reputational damage caused by a breach, for example.
Decreased Valuation: If a cybercriminal steals intellectual property and the theft results in a decrease in the company’s valuation, a cyber insurance policy may not cover the loss.
Speak with your insurance provider today about what your policy covers.
How To Protect Your Nonprofit From Cyberattacks?
Consider implementing the following to protect your nonprofit from cyberattacks:
- Back up your data
- Secure your devices and network
- Encrypt important information
- Ensure you use multi-factor authentication (MFA)
- Change passwords regularly
- Monitor use of computer equipment and systems
- Put policies in place to guide your staff
- Train your staff to be safe online
- Limit access to information
- Keep your software and hardware up to date
- Consider cyber security insurance
Taking the above measures will save your nonprofit from losses that you may have not considered.
How Much Does Cyber Liability Insurance Cost?
General cyber liability insurance costs for nonprofits vary on the coverage. Nonprofit organizations pay a median premium of about $45 per month, or $500 per year, for general liability insurance. Actual costs may vary.
This policy provides financial protection for third-party bodily injuries and property damage, along with advertising injuries.
Keep Your NonProfit Safe From Cyber Attacks with CSIP
Looking to avoid being a victim of a cyber attack? At CSIP, we are passionate about helping nonprofits succeed.
Our administrators will help you determine what type of coverage your nonprofit organization needs for a cyber liability insurance policy. Our experience with non-profits allows us to save you money on premiums and alleviate financial strain.
Contact us today at (888) 794-7771 or request a quote.