The year 2020 legitimized online work, especially for freelancers. However, the move to digitizing sensitive customer information and placing it online has presented issues. For example, the number of hacks and hacking attempts has increased. So, here in this article, we provide a brief guide on cybersecurity insurance for freelancers and everything you need to know.
Introduction of Cybersecurity Insurance For Freelancers
According to data, small business data breaches increased five-fold from 2019 to 2020. Sometimes hackers hack to practice their skills, and the easiest target is a small business.
Computer and network security is an investment, just like insurance. Many small companies use free security software options. They also don’t believe that they will become targets until they do.
Some hackers may have the intention of moving on to bigger targets such as the government and corporations. They start with the easy mark and move on to the true victim.
The Target Data Breach of 2013
The Target data breach that took place on Black Friday 2013 became the largest of its kind. Hackers obtained Target customer credit and debit card information.
This incident led to credit and debit card issuers revamping and adding chips for more security. Even if nothing happened directly to the 70 million affected in the Target incident, they could have fallen victim to scams and identity theft. If an accident like this occurs to a freelancer, it will wipe out their business.
After all, the Target Corporation paid out $18.5 million to 47 states in lawsuits. No shortage of business insurance policies exists for small business owners, corporations, and freelancers. Freelancers have several self-employed policies to research; Gigly has already outlined some to explore.
Important insurance policies to obtain include:
- General liability
- Professional liability
- Business owner’s policy
All freelancers who work online, in technology-related fields, or handle sensitive customer data, such as retailers, benefit from acquiring cybersecurity insurance.
What Is Cybersecurity Insurance?
According to data, half of the small businesses have experienced a data breach. At least half have also experienced multiple breaches of data. That’s one reason why freelancers benefit from protecting themselves through insurance and installing antivirus software. Those who work on a network of computers must secure it too.
Freelancers can use third-party services such as payment processors to prevent security breaches. However, you remain the face of your company. Since you collected the sensitive information, customers expect you to take care of it.
Therefore, this insurance policy kicks in after a data breach occurs. It covers the cost of your liability in the incident.
What Does the Insurance Cover?
Most policies cover the potential financial fallout from a data breach. Then it covers the legal costs that you might incur if a plaintiff files a lawsuit against you.
Professionals in any field must notify their customers when a data breach occurs. They should find out from you instead of via social media or through the media. However, when customers find out, they will have questions.
Therefore, the policy also covers:
- Notifying customers
- Helping customers affected restore their identities.
- Recovering the breached data
- Improving your operations so that another breach does not occur
It is a process, and your policy helps you complete it.
Why Do Freelancers need it?
Every insurance policy on the market has a specific purpose. A commercial vehicle policy only covers the vehicles assigned to it. Professionals must obtain commercial property to protect their commercial property, such as the office.
Even though freelancers obtain a professional liability policy or a general liability policy, the insurance market has separated cybercrime liability from property liability.
Moreover, the insurance companies have separated liability caused by a product and liability from an on-premises incident. Therefore, you must pick up a specific policy that handles data breaches.
What Is the Cost of Cybersecurity Insurance?
The cost of the policy depends on the agent you use to obtain it. However, the average price hovers around $145 monthly on average.
If you already have insurance policies with well-known companies, consider negotiating pricing and bundling policies. Ideally, the provider will offer a discount for your loyalty.
Although it seems like insurance is an investment that has no payoff, it does protect freelancers. Cybersecurity policies protect freelancers in case a data breach occurs on their watch. The public is sensitive to incidents and events that put their identity and financial well-being at risk. Therefore, you help protect them and yourself.