Insurance for Cybersecurity Companies and Consultants

Small business insurance is often required by law for cybersecurity professionals, depending on certain factors. You may also need specific policies depending on your clients, commercial space requirements, or lenders.

Here are some examples of situations where cybersecurity professionals may need insurance:

• You have a business-owned vehicle. Companies with vehicles are required to carry commercial auto insurance in most states. If you're using rented, leased, or personal vehicles, you'll need hired and non-owned auto (HNOA) coverage.
• You have employees. Most states require workers' comp insurance after hiring your first employee.
• You apply for a business loan or rent a commercial space. Landlords and lenders often require general liability insurance in order to sign a contract.
• Your clients or partners request coverage. Clients and partners may refuse to work with your business unless you carry certain types of insurance. E&O insurance and a fidelity bond are common requests from clients.

Most small businesses start with a general liability insurance policy, which covers many common business risks, such as customer injuries, third-party property damage, and advertising injuries.

Even very small businesses are not immune to the same lawsuits and liabilities that some of the biggest companies face, so having the right policies is critically important.

You can speak to a licensed insurance agent if you have questions about the best insurance policies for your cybersecurity business needs.

Cyber insurance protects your business from paying for response, recovery, and legal defense costs if you or your clients suffer a data breach, ransomware attack, phishing attempt, or other cyber incident.

There are two kinds of cyber insurance:

• First-party cyber insurance protects against data breaches and cyberattacks that directly affect your cybersecurity company, such as a DDoS attack that overwhelms your network. This coverage is essential if your company handles personally identifiable information (PII) or other sensitive customer data, such as protected health information (PHI), financial records, and credentials.
• Third-party cyber insurance helps pay for legal costs when a client blames your cybersecurity company for failing to prevent a data breach or cyberattack at their business. For example, a vulnerability in security software that your clients depend on could expose their customers' sensitive information.

When you buy tech E&O, it includes third-party cyber insurance, along with errors and omissions insurance to protect against other lawsuits from dissatisfied clients.

To protect your own business from cyber incidents, you'd need to purchase a standalone cyber insurance policy for first-party cyber coverage, though it can also typically be added to a general liability or business owner's policy (BOP).

Your tech E&O policy will often have a retroactive date, which determines how far back a claim is covered. It's important to pick the right dates to ensure your cybersecurity work is adequately covered.

Cybersecurity businesses often invest in additional policies to cover a wide range of insurance claims.

You may want to consider the following:

• Business owner's policy (BOP) combines a general liability insurance policy with a commercial property policy to cover many of the most common liability risks, as well as your business property.
• Commercial property insurance covers the cost of repairs or replacement if a fire, storm, vandalism, or other incident damages or destroys your business property or its contents. You can also add equipment breakdown insurance as an endorsement to help your business recover from machinery failure.
• Electronic data processing (EDP) insurance protects your electronic equipment, including storage devices and computers, if you experience data loss due to a power surge, fire, or covered natural disasters.
• Business interruption insurance helps with lost income and other financial losses resulting from a covered loss of property, such as damage from a fire or natural disaster. It's also called business income insurance.
• Employment practices liability insurance (EPLI), a type of management liability insurance, protects your business if you're sued by an employee for violating their rights, such as harassment or discrimination.
• Directors and officers (D&O) insurance covers your board of directors and other key decision-makers from legal fees resulting from claims of poor direction and mismanagement.

Cybersecurity business owners can save money when shopping for insurance in several ways:

• Pay the full annual premium. It's usually cheaper to pay the full annual amount rather than pay your premium in monthly installments.
• Bundle policies. You can often combine policies purchased from one insurance company in a cost-saving package. The most common example is a business owner's policy.
• Choose lower limits or a higher deductible. Though you'll want enough coverage for a potential claim, you can opt for lower policy limits or a higher deductible to reduce your premium.
• Shop around. By filling out TechInsurance's easy online application, you can compare quotes from top-rated insurance providers to find a policy that fits your budget.

Licensed TechInsurance agents can help find you the best insurance for cybersecurity professionals without breaking the bank, giving you financial protection and peace of mind.