Cyber vs Crime Insurance: Differences Every Business Must Know

Safeguard Your Arizona Company With Proper Insurance: Protect Your Assets & Reputation

Imagine waking up to discover your business has lost thousands of dollars overnight due to a single cyberattack. In today’s digital-driven world, threats aren’t just external hackers lurking behind screens; they’re also internal, often coming from trusted employees. That’s why many businesses turn to crime insurance providers.

Some business owners assume cyber insurance alone is enough, but overlooking crime insurance can leave a costly gap in protection. Understanding the critical differences between cyber and crime insurance is essential for safeguarding your assets, reputation, and future.

To help you understand these differences, we’ve created this brief guide with a few examples so you can be ready to protect your Arizona company fully with proper insurance.

Consulting with an expert about cyber insurance options to protect your business

What Is Cyber Insurance?

Cyber insurance is a special insurance created to protect companies from financial losses caused by different digital threats, including data breaches, hacking, and ransomware attacks.

It helps cover the costs of managing crises that compromise your business’s systems. It usually includes notifying customers, recovering data, legal fees, and repairing your company’s reputation. Essentially, it’s your business’s safety net against costly online risks that traditional insurance doesn’t cover.

This type of insurance includes protecting your business from:

Data breaches: Cyber insurance offers coverage for the costs of data breaches, including credit monitoring services and notifying affected parties.
Cyber extortion: If your business faces dangers related to cyber extortion (where hackers demand a ransom to prevent or stop a cyberattack) the cyber insurance helps you cover the ransom amount and other expenses.
Business interruption: Cyber insurance can compensate for the lost income regarding cyber incidents that disrupt your business operations.

What Is Crime Insurance?

Crime insurance covers businesses from financial losses caused by criminal activities that usually involve fraud, theft, forgery, and embezzlement. Unlike cyber insurance, which deals with digital threats, crime insurance focuses primarily on physical or internal crimes (especially those committed by employees or insiders).

It helps companies recover losses from stolen money, securities, or assets, and can also cover related expenses like investigation costs and legal fees. Think of crime insurance as protection against financial harm caused by dishonest acts within your business operations.

This type of insurance mostly addresses these crimes:

Employee misconduct: It helps you cover the financial repercussions of employee theft, embezzlement, or fraud. It also offers coverage for losses caused by dishonest acts committed by your employees.
Third-party fraud: Crime insurance helps you cover cases where external entities, such as clients or vendors, engage in fraudulent activities that result in financial losses for your business.
Forgery or alteration: It can also help you mitigate losses when your Arizona company falls victim to forged or altered checks, documents, or securities.

Key Differences Between Cyber & Crime Insurance

Both insurances are crucial for your company, but they share a few differences that should be noted before hiring any Arizona insurance company. Here’s a list of some of them:

Coverage focus: Cyber insurance focuses on digital threats, while crime insurance focuses on financial and physical crimes.
Type of risks covered: Cyber insurance helps you cover online risks and system disruptions, and crime insurance helps you with internal theft, forgery, and fraudulent transactions.
Claims: Claims for cyber insurance often involve data recovery, customer notifications, reputation management, and legal fees. Crime insurance focuses on stolen money/assets, fraudulent checks, and internal theft investigations.
Main purposes: Cyber insurance protects digital assets, while crime insurance focuses on safeguarding physical and financial assets.

Why Businesses Need Both Cyber & Crime Insurance

Arizona companies nowadays need both types of insurance because each type of coverage addresses unique vulnerabilities. Cyber insurance focuses on common digital threats. It covers crucial costs related to customer notifications, legal fees, and reputation management, giving your business essential protection in today’s reliance on digital technology.

On the other hand, crime insurance protects your company from financial losses that arise from internal threats, which are also a common danger not only in big companies, but also in start-ups and medium-sized enterprises. This type of insurance is vital since internal threats can often go unnoticed until significant damage has occurred.

By having both cyber and crime insurance, your company can achieve comprehensive protection against the broad spectrum of risks it faces, ensuring greater financial security and peace of mind.

Choosing The Right Insurance Coverage

While we highly recommend both types of insurance, you still need to be sincere about your company’s needs before hiring anything.

Start by evaluating your business operations, size, and the digital and financial threats you might face. For example, some companies handle large volumes of customer data, so they can benefit from strong cyber insurance, but companies with numerous employees might benefit better from crime insurance coverage.

It’s also helpful to assess the potential financial impacts of different threats. Consider how much you could realistically lose in the event of a cyber breach or internal theft.

Consult an experienced Arizona insurance professional for personalized guidance on selecting coverage that aligns with your industry’s risks.

Get Help From Professionals

Both coverages play essential roles in protecting your company against threats that can severely impact its finances and reputation. Don’t leave your business exposed—partner with an experienced broker to select the best coverage for your industry.

At PJO Insurance Brokerage, our expert brokers specialize in finding customized insurance solutions designed to secure your Arizona business from every angle. Contact us today to explore your options and ensure you’re fully protected against both digital threats and financial crimes.