The need for cyber insurance has grown hand-in-hand with our increasingly digitised, interconnected world. With billions of people online, these users are a key target for attackers, whether they are cybercriminals, hacktivists or state-sponsored attacks.
As such, the attack surfaces for cyber criminals (and the creators of malware) to exploit have increased, making it ever more important for a business to ensure that it has the right cyber insurance for its needs.
In addition, there is now a greater focus on cyber insurance in the insurance industry, with a number of insurance providers offering Cyber policies for the first time.
What is Cyber Insurance?
A Cyber Insurance policy will act to protect both the interests of an organisation and its customers, helping to ensure they retain their businesses and personal data.
What are the Coverages Under Cyber Insurance?
1. Privacy Breach Notification & Crisis Management Costs
Many Cyber policies will offer a notification service, whereby a company must alert its insurer of a potential breach of its systems. In addition, the policyholder must follow the insurer's advice regarding a potential data breach.
Additionally, the policy may offer a crisis management and PR service to assist the policyholder in the event of a breach or loss.
2. Privacy & Security Liability
This coverage protects against third-party legal actions against businesses related to privacy and security. For example, if a third party sues a policyholder because his personal information was leaked as part of a system breach, the insurance policy will cover the costs of the legal defence.
This is a vital cover for any organisation that stores personal information, as the potential costs of a data breach can be substantial, even if the financial impact is not obvious.
The potential for reputational damage is also high, particularly in the event that sensitive information about an individual is accessed by a cybercriminal.
3. Cyber Extortion
There are a growing number of reports of cyber extortion, whereby a cybercriminal will attempt to extort money from a company in exchange for stopping a cyber attack.
Insurers may cover the costs that only a business can cover, for instance, the costs of paying a ransom if a cybercriminal has encrypted sensitive data.
4. Business Interruption – Loss of Profits & Operational Expenses
This coverage is critical for any business that may be disrupted by a cyberattack. For example, a business that relies on online sales but has its online store breached by a cybercriminal could suffer substantial financial losses.
This can also apply to a business that has suffered a DDoS attack, where an online presence is so severely disrupted as to be impossible to use.
5. Data Recovery & System Damage
Data can sometimes be corrupted in a cyberattack, requiring expensive data recovery and restoration costs. Likewise, the computer hardware may suffer from a cyberattack.
The cover will cover the costs of any security upgrades and hardware or software replacements that are required.
The Bottom Line: The Importance of Cyber Insurance for Your Business
Cybercrime is a major threat to businesses and the public. Cyber insurance can help to mitigate the financial damage that a cyberattack can cause.
In particular, a policy that covers the costs of privacy and data breaches can support a business that is trying to manage a data breach, with crisis management services and notification services.
However, business owners should also ensure that they review their cyber insurance on a regular basis. Taking steps to improve security by installing an advanced security solution can help to avoid any potential problems caused by a cyber attack.
How Can We Help You?
The holidays are fast approaching, and it only makes sense that you take the right steps to ensure your business is well protected. And the best way to do that is by getting business insurance.
New Wave Insurance helps you find an insurance policy that fits your needs. From assets to your business, down to your vehicles—we've got you covered. Learn more about how we can help you today!