You might have heard and known, through experience, perhaps, about some cyber incidents like data breaches, etc. But have you heard of cybersecurity insurance? Cybersecurity insurance guards businesses/organizations against economic losses, which can be a result of theft and data breaches, ransomware attacks, system hacking, and service denial.
As a business proprietor, your utmost priority is to acquire the finest cybersecurity resources that fit your budget, and one of the best ways to alleviate cyber risks is to obtain cybersecurity insurance. According to research, fortunately, cybersecurity insurance is fast growing, but unluckily, more than a quarter of organizations have zero plans to adopt cyber insurance. Yet, for instance, in the United States, the average cost of a data breach has risen by 60 percent over the years.
However, there is quite a range of information about cybersecurity insurance that you need to understand.
Is Cybersecurity Insurance Essential?
Cybersecurity insurance is becoming increasingly crucial for all organizations that are on the brink of possible cyber attacks as attacks against devices, applications, users, and networks grow. However, it is more advisable that organizations prepare ahead for potential cyber-attacks because once that cyber incident happens, it is significantly challenging to fall back in place regarding revenues and reputation.
A cybersecurity insurance policy is created to protect organizations against cyber incidents, like malware attacks, and assist with the restoration of lost resources as a result of security incidents.
Who Needs Cybersecurity Insurance?
Organizations that store, create and manage data, like customer sales, customer contacts, credit card numerals, and PII, can enjoy cybersecurity insurance. Also, e-commerce organizations can also profit from cybersecurity insurance since cyber incidents can aid loss in customers and sales.
Likewise, businesses that save up customers’ information online can profit from the policies that cyber insurance creates, like liability coverage.
The Forms of Cybersecurity Insurance
Companies/Businesses of different forms are at risk of various kinds of cyber attacks. As a business owner, your privacy, information, and operations are vulnerable to possible attacks, but cybersecurity insurance can help guard your business through the various forms listed below:
Network business disruption coverage
Suppose your organization relies solely on technology for productivity. In that case, you need to include the network business disruption coverage in the organization’s cybersecurity insurance program to guard your organization against cyber risks.
If you experience network interruptions, you can use the coverage to pay for lost profits, extra costs, and fixed expenses during the period that your organization got affected when the network was off. It also applies to various security attacks like unsuccessful software patches and human errors. If you are wondering if your insurance carrier will drop you because your IT security is not up to snuff, the answer is No.
This type of coverage, network security, is essential for many organizations, especially companies that are reliable to privacy and information risks. This insurance section protects your business in case of cyber issues like malware infection, data breach, ransomware attack, or email compromise.
Theft and fraud
The theft and fraud policy covers the payment for expenses generated due to data loss as a result of theft and fraudulent activities. It might also encompass risk management which can be a result of fund transfers or dishonesty.
Extortion and blackmail
A wide range of cybercrimes consists of extortion and blackmailing that could erode the organization’s intellectual property if it is unsuccessful in the ransom payment. Fortunately, an organization that has adopted the cybersecurity insurance policy will enjoy the benefit of the policyholder paying the ransom to avoid reputational damage and collecting enough evidence concerning the perpetrator.
Regulatory coverage helps to cover costs regarding forensic and technical services. It might also encompass the costs of damages due to security incidents that involve the government wanting to have knowledge of the cause of such incidents in order to avoid such later on.
Communications and notifications
Communications and notifications cover expenses regarding effective communications to stakeholders concerning an incident and the practical methods you are using to tackle it. The stakeholders mentioned can be your employees, third parties, or clients.
In What Way Does Cyber Insurance work?
Cyber insurance procedures are peddled by various suppliers that offer similar business insurance like commercial property insurance, business liability insurance, and E&O insurance. Quite a large number of these policies consist of first-party coverage concerning losses that affect an organization and third-party coverage concerning losses that affect other organizations due to a cyber incident resulting from a mutual relationship.
Cyber insurance programs help to cover monetary losses that arise as a result of cyber incidents. Also, it assists with crisis communication, investigations, and refunds or customer credits.
What Doesn’t Cybersecurity Insurance Do?
The following are some things cybersecurity insurance does not cover:
- Taking defensive measures against future cyberattacks
- Covering for an intellectual property loss
- It does not cover any property damage
- It does not cover self-inflicted cyber crimes
Get Your Business Insured with C Solutions
At C Solutions, we are committed to providing effective IT solutions for business owners in Florida.
Contact us for more inquiries or to book a consultation.