Data protection insurance | 2023

A data protection insurance is one whose coverage is financial losses that occur as a result of violations of data protection regulated by law.

Therefore, we are dealing with a protection product, such as the one for the home or the car. Only, in this case, what it covers is the possibility that we violate data protection laws, logically, involuntarily.

Let’s imagine that a client’s data is leaked due to a cyber attack. He sues us and the judge decides that we should pay him $10,000. Well, what this insurance does is cover that loss of the company.

Data protection insurance and the law

In every country in the world there are data protection laws and breaching them carries very high penalties. In addition, if it is proven that there was intent, it could even be a criminal offense.

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In the case of a company, this unforeseen expense can pose a financial problem. For example, it may affect your liquidity. Thus, data protection insurance allows you to recover the money from these sanctions or legal defense, among other coverages.

Recommendations on data protection insurance

We already have data protection insurance and the unthinkable happens, a security breach. Let’s see what recommendations we can follow to return to comply with the laws:

  1. The first thing is to have the data updated again. We must verify that they are enabled, the origin and the level of user acceptance.
  2. Data must be reauthorized to comply with data protection laws.
  3. The data that does not have the consent of the owner must be protected again.
  4. Propose a system of audits and periodic evaluations of the system.
  5. Review third-party contracts to ensure they also comply with the law.
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Data protection insurance coverage

We must bear in mind that, depending on the company, the coverage offered may vary. Let’s see the most common:

  • In the first place, the civil liability that we may incur. That is, the damage or harm caused.
  • The fines or sanctions of the various bodies that regulate data protection.
  • Defense expenses for potential customer or employee claims.
  • Expenses caused by non-compliance and related to the image of the company.
  • Protection against cyberattacks that violate data protection laws.
  • Finally, civil liability insurance will also offer coverage for the cost of advice from expert professionals.

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