Cybersecurity was ranked first in a list of emerging casualty risks among insurance buyers, according to a survey of 135 insurance professionals conducted by London-based specialty lines broker RKH Specialty. Seventy percent of respondents ranked cyber risk as the top concern. According to a Best’s News Service Article* about the survey, healthcare and retailers have been the major buyers. Logic suggests that the growing demand for specialized cyber coverage is driven by the simple fact that losses stemming from cyber-related attacks and business interruptions can be catastrophic. Of course, not all policies are created equally – so here are five key questions to ask your broker regarding POS security breaches. If you are considering purchasing cybersecurity coverage, ensure that as a policyholder, you are adequately protected from losses after a cyberattack.
5 Key Questions to Ask Your Cyber Insurance Provider About POS Security Breaches
Cybersecurity Ventures estimates that cybercrime will cost the global economy more than $10.5 trillion a year by 2025! As such, businesses must take cybersecurity seriously. Part of this is ensuring you have cyber liability insurance in place to protect you in the event of a cyber attack.
1. Does My Policy Cover Business Interruption and Loss of Revenue?
A cyberattack can disrupt operations, resulting in substantial financial losses. According to IBM’s Cost of a Data Breach Report (2023), the average global cost of a data breach was USD $4.45 million, with lost business accounting for nearly 40% of the total. Small to mid-sized businesses often suffer the most because even a few days of downtime can have long-term financial impacts. Many small and mid-sized businesses (SMBs) face lengthy recovery times. In fact, 50% report taking 24+ hours to recover, and over half experienced 8–24 hours of downtime, which can significantly impact revenue and customer trust. The loss of revenue and customer trust could be a bigger loss to your business than the ransom itself. Confirm that your policy provides coverage for the income you lose while your business is down and unable to operate.
POS Security Breaches: Business Interruption Insurance (BI)
Business Interruption Insurance is designed to help you recover lost income and ongoing expenses while your business is temporarily closed. This type of insurance coverage can help you prepare for the unexpected. It can help your business:
- Prevent the loss of income if your business cannot operate
- Protect yourself from financial obligations that do not stop, even though your business is closed due to a loss, including bills and lease payments
- Extra expense coverage is available to pay for additional costs over normal operating expenses, such as relocation expenses
BI insurance usually cannot be purchased as a standalone policy. Most insurers will include it under your commercial property insurance or offer it as an add-on to your base policy.
2. Will the Policy Cover the Costs of Responding to a POS Security Breach?
In the event of a cyber attack, forensic investigations alone can cost anywhere from $10,000–$100,000+, depending on breach size. Beyond direct financial losses, an incident response plan involves significant costs. Ensure your policy covers:
- Forensic investigation: To determine the extent of the POS security breach.
- Public relations: To manage reputation damage and inform the public. Reputation matters: surveys show 55% of consumers say they would stop doing business with a company after their data is compromised.
- Legal counsel: To navigate regulatory compliance and potential lawsuits. Legal fees are also significant — in Canada, the average class-action data breach settlement runs into the millions.
- Ransom demands: If you face a ransomware attack.
- Some policies even help with credit monitoring costs for affected customers, which is now considered standard in response.
3. Is Your Insurance Provider Knowledgeable About Your Industry?
Dependent on the industry, there are different rules that may apply as some businesses have very specific data compliance regulations. As a business, it’s no use going for the most affordable or cheapest option if the provider doesn’t have enough knowledge or experience to cater to your specific requirements. Make sure that your prospective insurance provider understands the specific data handling needs of your business. Our knowledgeable trained isure brokers can recommend insurers that will fit best with your business’ specific needs.
4. What Are Vendor and Third-Party Data Security Requirements?
Cyber risk doesn’t stop at your own network. Most businesses rely on vendors, cloud providers, or contractors who handle sensitive data — and that creates additional points of vulnerability. In fact, Verizon’s 2025 Data Breach Investigations Report found that 30% of all data breaches involve a third-party supplier, double the share from the year before.
Large organizations aren’t immune: 97% of the top 100 U.S. banks and 98% of Europe’s largest companies reported third-party breaches in the past year. For smaller companies, the picture is just as serious — a 2025 Prevalent survey shows that 61% of businesses experienced a vendor-related security breach, a nearly 50% jump from the prior year.
Because of this, many cyber insurance providers now set strict requirements around vendor security. Policies may demand that you:
- Audit vendor security practices and contracts.
- Ensure cloud or IT service providers use recognized security standards.
- Regularly review and monitor third-party risk assessments.
Failing to meet these requirements may mean a POS security breach that originates with a vendor won’t be covered. Given that the average cost of a third-party breach is over $5 million, it’s critical to understand exactly what your insurer expects.
5. Are There Any Limitations or Exclusions for Specific Types of Attacks or Data?
Sometimes, there is fine print that will need careful attention. Missing certain details might just land your business in some hot water. So, make sure that you check if there are any incidents that cyber liability insurance won’t cover. For example, some insurance providers do not cover business practices that pose an avoidable risk. This could include your business’s bring-your-own-device (BYOD) policy. Additionally, some policies might not cover certain types of fraud or data loss. Understanding these clauses will help you accurately assess your risk and prepare for potential gaps in coverage, or if a POS security breach occurs due to an unencrypted employee device, insurance might not cover it. So, make sure you clarify exactly what the cyber insurance provider will cover and what it will not cover.
BI insurance helps to protect you against loss events, such as floods, windstorms, earthquakes, fire, and other perils. You can also get protection from other unexpected events that hurt your operating ability. However, BI Insurance does not cover all expenses. Here are some of the events that would not be covered under a BI policy:
Common exclusions include:
Acts of war/terrorism (state-sponsored attacks)
Unencrypted data (if you fail to encrypt sensitive info)
Insider threats (employees stealing data)
In 2022, over 20% of claims were denied due to policy exclusions (according to industry claims reports). Reviewing exclusions carefully ensures you don’t assume coverage that isn’t really there.
Final Thoughts on POS Security Breaches
Cyber insurance is a must-have for businesses, however it is also not a ‘one-size-fits-all solution’. Understanding exactly what your policy covers — and where it leaves you exposed — can make the difference between a manageable recovery and devastating losses. By asking the right questions up front, you can safeguard your business, reassure your clients, and prepare for the unexpected in today’s digital landscape. As such, it’s important that you don’t skimp over the process of deciding on a cyber insurance provider. The cost and reputational loss for businesses are just too huge and, in the end, not worth the risk. As a business, take the time to consider your options, weigh them up, and make sure that you cover all bases. Speak with one of our isure representatives to ensure that your business is fully protected from POS breaches.
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