According to Gartner, cyber insurance is a contract between an insurer and a company to protect against losses that are related to computer- or network-based incidents.
Cyber insurance or cyber liability insurance is an insurance policy that helps protect businesses from the fallout of cyberattacks. A cyber insurance policy can help reduce business disruption during a cyber incident and thereafter. It can also help to possibly cover the financial cost aspects of the attack and recovering from it.
There are things that cyber insurance can’t protect against. An organization will need to ensure and ascertain what is covered and what isn’t before signing up for a coverage plan. The responsibility isn’t something that can just be shifted to the insurer. A business is ultimately responsible for its own cybersecurity.
“Cyber insurance will not instantly solve all of your cybersecurity issues, and it will not prevent a cyber breach/attack,” says the National Cyber Security Centre in its guidance.
who needs cyber insurance?
All businesses with an online footprint or sending or storing electronic data may benefit from cyber insurance. This includes any organization that relies on technology to conduct its business operations.
Hackers may also try to cripple a system or network with ransomware to get a payoff. This is where a cyber insurance policy that covers ransomware could go a long way in helping a business that becomes a victim of such an attack.
The basics of cyber liability insurance
Every company has cyber risks. Cyber attacks are ranking No.2 as the biggest business risk worldwide. As a result, the cyber insurance market has evolved. It went from a highly niche risk transfer tool to a critical for enterprise risk management. Some clients are still asking us how much is covered under cyber insurance? Personal data such as the contact details of customers and staff, health data, intellectual property (IP), or financial data are all lucrative targets for cybercriminals and hackers. If it is attractive as a target, rest assured hackers will try to hack into a system and steal the data.
What kind of attacks can trigger cyber insurance claims?
All kinds of cyber security incidents can trigger cyber insurance claims, the most common being ransomware, transfer fraud attack, and phishing scam.
How much does cyber insurance cost?
Most importantly, it depends on the insurance company. Though typically, the cost of a cyber insurance policy depends on several different factors such as the organization’s size and its annual revenue. The other factors that can impact the cost include the industry the business operates in, the type of data the business deals with and the existing cybersecurity in place.
A business with poor cybersecurity or a history of data breaches and security incidents will be charged more for a cyber insurance policy by the insurance company than an organization with a good reputation for keeping itself protected.
In industries such as health and finance, cyber insurance policies cost more because of the sensitive nature of the data they deal with.
What does a cyber insurance policy cover?
There are as many Cyber security policies as there are providers and different policies will provide coverage of different aspects of cybersecurity. In general terms, cyber insurance coverage mitigates some of the immediate costs associated with a cyberattack.
For instance, coverage of data recovery and system forensics may help mitigate some of the cost of investigating and remedying a cyberattack through the use of experts in forensic cybersecurity to help find the cause and assist in fixing it.
Organizations need to ensure they know exactly what they’re signing up for when choosing a cyber insurance policy. This is what makes Cyber Insurance Policy checking so critical. It is essential to ascertain if the policy covers the potential damage from the cyberattacks at a granular level.
What isn’t covered by cyber insurance?
It is vital to understand what isn’t covered by a cyber insurance policy. This makes it easier to understand and know what aspects of cybersecurity to focus on.
Loss of intellectual property or the financial damage caused by the attack isn’t covered by cyber insurance. The reputational costs following a cyberattack may not be covered either.
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Data breaches and cyber-attacks have become way too common. In recent years, data breaches have resulted in negative legal, financial and reputational impacts. This is one of the most important reasons you need to ensure coverage at a very granular level.
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