What Is Cyber Insurance?
Cyber insurance is a type of coverage that protects businesses from financial losses caused by cyber attacks. Think of it as a safety net for your business when hackers strike. It doesn’t replace your cybersecurity services, but it helps cover the costs if those protections ever fail.
Most cyber insurance policies can help pay for things like:
- Data recovery and system repairs
- Legal fees and settlements
- Ransom payments
- Customer notification and credit monitoring
- Loss of business income due to downtime
If your business stores customer data, accepts online payments, or uses cloud systems, cyber insurance is no longer optional — it’s essential.
Why Cyber Insurance Is More Important Than Ever
Cyber threats are evolving fast. Even small and mid-sized businesses are now frequent targets for attacks. According to the Hiscox Cyber Readiness Report:
- 53% of U.S. businesses were hit by a cyber attack in the past year
- The average cost of a cyber attack was $4.45 million (IBM)
- Ransomware costs have grown by over 60%, with businesses paying millions just to regain access to their own systems
- Cyber insurance claims increased by 50% in the last two years
Even with managed IT services and strong protections in place, there’s always a chance that something slips through. That’s where cyber insurance steps in.
What Does Cyber Insurance Cover?
While policies vary, most cyber insurance plans include these types of coverage:
1. First-Party Coverage
This covers your direct losses, including:
- Data recovery
- Lost income
- Business interruption
- Ransomware response
- IT forensics
2. Third-Party Coverage
This protects you if a customer or vendor sues after a breach:
- Legal fees
- Settlements
- Regulatory fines
- Crisis management and PR support
The right policy fills the financial gap between a cyber attack and your ability to recover.
Why Cyber Insurance Doesn’t Replace Cybersecurity
Having cyber insurance doesn’t mean you can skip strong IT protections. In fact, most insurance providers require businesses to have certain IT support practices in place before issuing a policy.
This might include:
- Multi-factor authentication (MFA)
- Regular software updates and patching
- Employee cybersecurity training
- Network assessments
- Disaster recovery plans
Insurance is the backup. Your first defense should always be strong cybersecurity services.
How to Choose the Right Cyber Insurance
Choosing the right policy can be tricky. Not all cyber insurance is created equal. Here’s what to look for:
- Coverage for ransomware, phishing, and business email compromise
- Reimbursement for legal and notification costs
- Support for reputation damage
- Flexibility to scale with your business
- A reputable insurer with cybersecurity expertise
Our IT consulting team can help review your policy or connect you with insurance partners who understand modern threats.
Who Needs Cyber Insurance?
If you:
- Store customer or employee data
- Use cloud-based tools or applications
- Accept online payments
- Work with vendors who access your systems
- Operate in healthcare, finance, or legal industries
… then you need cyber insurance. Even if you’ve never had a breach before, the risk is too high — and the cost of recovery too steep — to go without coverage.
IntermixIT Helps Protect What Insurance Can’t
At IntermixIT, we help businesses protect themselves before an attack happens. Our supplemental IT services and managed IT services give you the tools to prevent, detect, and respond to threats.
We also work with businesses to make sure they meet the technical requirements their insurers demand — and we stay on top of compliance so you don’t have to.
Book a Free Cyber Insurance Readiness Call
Not sure if your business qualifies for cyber insurance? Need help meeting the requirements?
Let’s talk. Book a free 15-minute strategy call and we’ll walk you through it.
Frequently Asked Questions
What is cyber insurance for businesses?
It’s a type of policy that covers financial losses caused by cyber attacks, data breaches, and other online threats.
Why is cyber insurance important for small businesses?
Small businesses are often targets and may not have the resources to recover without financial help. Cyber insurance fills that gap.
Does cyber insurance cover ransomware attacks?
Yes. Many policies cover ransom payments, data recovery, and business interruption caused by ransomware.
Can I get cyber insurance without cybersecurity services in place?
Not usually. Most insurers require you to have protections like MFA, backups, and staff training in place.
How much does cyber insurance cost?
Costs vary based on the size of your business, the type of data you handle, and your risk profile. Some policies start around $1,000/year.
What should I look for in a cyber insurance policy?
Look for coverage that includes ransomware, phishing, third-party liability, regulatory fines, and legal defense.
Is cyber insurance tax deductible?
Yes. In most cases, it can be classified as a business expense.
How do I make sure I’m covered properly?
Work with a trusted IT consulting partner to make sure your tech setup meets insurance standards.
Does cyber insurance cover loss of customer trust?
Many policies offer PR and crisis management support to help protect your reputation after a breach.
How can I reduce the cost of cyber insurance?
Improve your security posture with managed IT services, employee training, and regular assessments.
