Why Cyber Insurance Is Important in Preparing for the Growing Cybersecurity Threat
- Businesses should prepare for the growing cybersecurity threats and ensure their security solutions are adequate for the evolving security risks.
- Attackers aren’t ceasing their efforts and continue to find organizations and businesses they can victimize.
- Taking cyber security insurance is the most logical starting point to protect your business from nearly all expenses related to cyberattacks.
- Cyber insurance covers damages resulting from cyber attacks.
- While cyber insurance is a potential key weapon in the cybersecurity arsenal, there are a few kinks to work out first.
Businesses in nearly all industries deal with cyber risks every day. The sophistication of the attacks is only growing. Organizations must find the best cybersecurity solutions and cyber insurance with the evolving attack vector and increasing risk.
Cyber insurance protects your business against financial losses after an attack. The insurance cover can help your business recover after a data breach — covering costs such as:
- Business disruption
- Revenue loss
- Equipment damage
- Legal fees
- Public relation expenses
- Forensic analysis
- The cost associated with legally mandated notifications
Businesses Need Cyber Insurance Regardless of Size or Industry
No matter the size or industry of the organization, every business is susceptible to a cyber attack. You need comprehensive cyber insurance.
Most businesses have at least one type of insurance to protect against employee-related risks or property damage. Many believe their insurance will cover them if they face a cyberattack.
Not every general insurance policies cover cyber-attack damages. As a result, insurance companies have launched specialized policies exclusive to cyberattacks. The cover incurs recovery services costs to help businesses up and running after a cyber attack.
Depending on the type of cover, the insurance company can cover litigation costs in case anyone sues your business due to a data breach. In other words, cyber insurance is essential for any company storing sensitive data. Without the cover, you’re at risk of losing everything.
The Hurdles to Getting Cyber Insurance
Getting you business insured against cyber attacks is not as easy as getting insurance for other risks. The application can be complex and technically exhausting for the average business person.
The technology involved with cyber insurance goes far and deep. Your business needs the right partner to help you ensure you have the right coverage against cyber-attacks or data breaches.
For instance, the insurance company will want your business to execute a vulnerability test. The test ensures your business has the basics covered and allows you to secure insurance. When done correctly, vulnerability tests can result in lower premiums.
Why Vulnerability Test is Critical
The cybersecurity gap assessment helps your business, and the insurance company establishes a baseline of your organization’s best practices, such as:
The biggest cyber risk your company has is its employees. An unprepared employee is the most significant security gap in your business. The insurance company will assess how you prepare your employees to play solid defense against attacks.
A vulnerability review is also essential to your business because it lets you understand what the insurance policy will protect. The policy can protect the following:
- Privacy liability: The policy protects businesses with sensitive customer data, medical records, or financial information. Breaches can expose your business’s sensitive information, violating privacy laws. Taking cyber insurance can protect your business from liabilities arising from the exposure of such data.
For instance, the cover will incur costs arising from liabilities required a contractual obligation, regulatory investigations by law enforcement and the government, and protecting your business from funding potential settlement in case of a data breach.
- Network security: The insurance can cover your business in the event of network failure that can stem from malware infection, cyber extortion demand, data breach, ransomware attack, or business email compromise. Network security coverage will incur all costs directly stemming from cyber incidents, such as public relations expertise, IT forensics, legal expenses, credit monitoring, reputation restoration, negotiation, and ransomware demand payment.
- Network business interruption: When your business depends on your technology to operate, you’d want to take network business interruption cover to protect you from operational cyber risk. When your network or network provider goes down due to a cyber incident, the cover lets you recover your lost profits, carter for fixed expenses, and incur the extra costs your business incurred during the impact.
- Errors and omissions: A cyber attack can prevent your business from fulfilling your contractual obligations and delivering services to your customers. The error and omission help your business cover claims arising from errors in performance or failure to execute your services. The services include SaaS, consulting, lawyers, doctors, architects, and engineers. The coverage will address all allegations of negligence or contract breach should an attack happen. Coverage can include indemnification or legal defense resulting from a lawsuit or customer dispute. Once your business has established baseline information, you should examine the insurance policy to understand what it’ll cover and what it doesn’t cover. Check the risks the insurance doesn’t cover, examine how the policy defines a security event, and confirm if human error or identity theft negates the coverage.
Cyber Insurance is Hard for Companies to Find, and It’s Only Getting Harder
Getting cyber insurance is difficult for businesses and will likely get more complicated. While cyber insurance is becoming a must-have for businesses, the spike in cyber and ransomware attacks makes it a less attractive niche for insurers.
The big problem is how many businesses are less adept at securing IT infrastructure. Insurance companies quickly point out how businesses must adapt and create secure protocols to protect their digital assets fully.
Cyber security insurance requirements are becoming more strict and detailed that many organizations have problems meeting. Your business needs to recognize and meet the security standard required to get cyber insurance.
Tech42 Helps Will Help Your Business Be Cyber-Insurance-Ready
Your business requires an active and holistic security approach to qualify for cyber insurance. You need adequate security solutions that protect your business to be cyber-insurance-ready.
After all, an uninsured business hit by a cyber attack faces huge expenses of IT forensics, crisis response, and recovery team to address the breach. A cyber insurance provider can help your business prepare to deal with an attack at a moment’s notice. Contact us today to help you get ready for cyber insurance.