In the non-profit world, you often focus on your organization's mission. You also work to secure donors to support it. Another important focus, however, should be protecting your business from cybercriminals.
Hackers prey on unsuspecting victims, who don't always have the necessary tools to fend them off. Even if you have an established cybersecurity framework, there's no guarantee that your network is impenetrable. This is why many organizations including non-profits are opting for cyber insurance.
Maybe you've heard of these types of cyber liability policies, or they're a completely new frontier you haven't explored. Whatever the case, here's an overview of why cyber insurance might be a good idea for your non-profit.
What is Cyber Risk Insurance? Why is it Necessary?
Cyber insurance is a relatively new concept. In the past, it was rare for organizations to invest in cyber policies, and it was likewise very easy to qualify for them. As time passed and cyber attacks increased in number and severity during the pandemic, cyber policies became more popular. However, stricter minimum requirements make these policies harder to qualify for.
Cyber insurance is a blanket term that can come with a bit of ambiguity. Insurance providers add coverage and change requirements often, so it's hard to pinpoint exactly what a typical policy will cover. That's why it's important to consult with your non-profit's IT support team so they can help you find the right provider and policy.
Why Should a Non-Profit Business Buy Cyber Insurance?
In the non-profit space, organizations' budgets are often fragile as they rely on donor support for all operations. In the same vein, loyal donors are the core of a non-profits survival. Sensitive donor information must be protected and handled carefully, as a cyber breach could be detrimental not only to these patrons, but your non-profits survival.
This makes non-profits a tempting target for hackers, because threat actors know they have a lot to lose. If your non-profit faces a ransomware attack, you could be forced to choose between making a large payout out-of-pocket or putting your donors' sensitive information at risk.
To learn just how much one of these breaches can set you back, read our blog: What Does a Cyber Breach Cost to Fix?
Cyber insurance can help alleviate these costs in the event of an attack. Cyber policies can assist with more than just payouts and the costs of forensic investigations, too. You may face lawsuits, a public relations crisis, and countless other expensive issues associated with cyber attacks.
Cyber insurance companies also provide a list of top providers and resources to assist you along the way. They can be great allies in moving forward from a devastating breach, and this help will be paramount to your recovery.
What Kinds of Businesses Need Cyber Liability Insurance?
Typically, the more sensitive information you house and the size of an organization's budget will determine the importance of cyber insurance. Just like outsourced IT services for non-profits, cyber insurance for non-profit organizations is ideal for smaller entities.
A small and nimble business may not have a large budget set aside to absorb the costs of a cyber breach like a bigger company would. Non for profit insurance companies are familiar with your strengths and weaknesses, so they are well-equipped to help you in case of a breach.
Another element that determines the best fit for cyber insurance is the sensitivity of the data you house. Healthcare businesses are bound to HIPAA regulations, for example, so cyber attacks can have far worse consequences in this industry. The same goes for the financial and legal industries, and any business that stores sensitive personally identifiable information is similarly vulnerable.
What is the Scope of Coverage Provided by Cyber Insurance?
There are several types of coverage often included with cyber insurance for nonprofits. Some of these include first-party coverage, third-party coverage, and crime insurance.
First Party Coverage
First-party coverage refers to any expenses you'll directly incur. These can include
- Privacy Breach Notification
- Computer and Legal Experts
- Cyber Extortion
- Data Restoration
- Public Relations
- Business Interruption
Third-Party General Liability Insurance
In contrast to first-party coverage, third-party cyber liability coverage helps with financial losses on the part of vendors, clients, and other outside entities. These can include:
- Privacy & Security
- Payment Card Costs
- Media
Third-party coverage can also help with external factors including regulatory proceedings and possible fines from the government. This is becoming more common as state governments crack down on loose cybersecurity, such as this 2023 fine issued to a healthcare company in New York.
Does Cyber Insurance Cover Ransomware Payments?
Generally, according to the IBM Security-Cost of a Data Breach Report in 2023, 10% of ransomware/extortion costs are typically recovered using insurance. If you choose to pay ransomware hackers, ransomware negotiation services can help to significantly reduce the amount of the payout.
However, beware that it's not always wise to pay hackers. Keep in mind that cybercrime networks often have ties to foreign states that pose threats to US security. In addition, many experts warn that you could be incentivizing criminals to keep extorting businesses by funding them, through these payments.
To learn more about ransomware and arguments for and against paying it, check out our blog: To Pay or Not to Pay: How to Handle Ransomware Negotiation.
How to Find IT Support and Cyber Insurance Providers
It may seem intimidating to find the right data breach insurance policies. Moreso, it can seem like a headache to find and integrate the best tools to mitigate the risk of cyber incidents. If you're interested in learning what cyber security insurance for small businesses costs and how to find a policy, an IT provider will be a great resource.
The cost of liability insurance for non profit organizations can vary. However, the benefits are significant when you think about the average cost of data breaches. With strong cybersecurity services and reliable IT support, you can improve your cybersecurity strategy. This helps you make the most of your IT budget.
If you're ready to learn the possibilities for cybersecurity readiness, click the button below to speak to an expert about your business.
