What is Cyber Insurance?
In today’s digital climate, businesses and organizations can conduct almost 100 percent of their dealings online or through digital communication methods. While this has expanded the reach of many businesses and increased efficiency for many, it has also resulted in another, more negative, consequence: risks of cyber attacks. Over the years, many customers have received emails from businesses informing them of a data or security breach. Unfortunately, these have become all too common, but that does not mean businesses have to bear the risks on their own. One of the recent developments in the cybersecurity world has been the rise of cyber insurance. This insurance helps mitigate and provide coverage against risks. Do you believe your business requires cyber insurance? Keep reading below for more information and contact us for advice.
Why Should You Have Cyber Insurance?
Cyber insurance is considered to be a specialty subset of insurance plans. Organizations can be vulnerable to cyber attacks such as phishing emails, denial-of-service (DoS), and ransomware. One single click or document download can result in massive consequences. Databases can be breached, and large quantities of consumer data can be fraudulently released. The concept of cyber insurance can seem odd, but most organizations would benefit from it. In fact, cyber insurance is growing widely in the US; as PwC states, the market is “estimated at $2.5-$3.5 billion annually.” Managing the risks related to cyber threats is no longer a novel concept. Having cybersecurity insurance in place means you are covered if a threat turns into an attack.
What Does Cyber Insurance Cover?
Depending on the organization’s needs, cyber insurance can cover a myriad of issues. One of the most beneficial aspects of having this insurance is the coverage of legal damages and/or fines. If a business experiences a mass data breach and it is sued in civil court or faces fines (this could happen if it failed to comply with a regulatory standard), cyber insurance can cover some of these costs. Other costs that could be covered include those necessary to conduct investigations into potential threats.
Furthermore, if the business requires aid in maintaining its reputation, coverage can include the costs for public relations campaigns. Interestingly, insurance can also cover the fees that might have to be paid in extortion situations – like ransomware. As well, if a breach results in the loss/theft of data or physical theft, insurance can cover the costs of the restoration.
Another aspect of this insurance is coverage of lost income. Let’s say a business faces a DoS attack. The attacker ensures valid users cannot access the business’ service, thereby denying sales or interactions. If the attack continues long enough, the business can lose substantial income. This loss in income can be covered by this type of insurance.
Choosing the right cyber insurance product can be complicated, which is why CDG is here to help. Contact us for more information and we will gladly guide you through the process.