Whether you are running a small-scale online store or having a multi-continental digital imprint, you can’t shy away from the importance of cybersecurity. With online assets becoming more valuable, consequential, and enumerated than tangible assets, cyber insurance has also become a necessity in recent times.
While awareness regarding safe online practices and cyber security is generally improving, many organizations still don’t know how to operate in the aftermath of a cyber attack. Similarly, decision-makers still don’t have much know-how about cyber insurance.
If you still haven’t understood this growing digital security need, then read on this article.
What Is Cyber Insurance and Why to Sign up for It?
In principle, the objective to sign up for a cyber insurance program is to transfer some of the risks to the insurance entity. Cyber insurance usually helps businesses in covering the cost of the investigation and the restoration work after an attack. They also take care of the losses incurred due to the ensuing downtime. Some packages also manage the alert and notification system to inform the affected client base in the wake of an attack.
The Coverage Span of Cyber Insurance
Like any other insurance premium, there is not a universal standard set for cyber insurance coverage. However, these are some of the common coverage areas of any cyber insurance plan.
• Data breaches taking place after an instance of employee theft
• Data breaches taking place after the forfeiture and loss of physical storage
• The business interruption (downtime) caused by a cyber intrusion
• Denial of service attacks are also covered under many cyber insurance plans
• Hacking and ensuing data breaches and theft
• Loss of data in an instance of a ransomware attack
• The rare occurrences of hardware damaged caused by a malware attack
If you want to know more about cyber insurance coverage spans, get in touch with any cybersecurity firm that is actually dealing in with this type of risk mitigation. You can also learn more here on this topic.
Take an Inward Look When Choosing a Cyber Insurance Plan
It’s better to first have a thorough look at the cyber setup of your business before picking up any cyber insurance plan. This introspection will help you in making the right decisions and investments to mitigate the risks of cyber malevolence.
The Training Level of Your Staff
How your staff is prepared against the shenanigans of cybercriminals play a crucial role in deciding the amount of money that you want to spend on covering your cyber infrastructure. It has been noted that the majority of cyber attacks are carried out by exploiting the human psyche through social engineering tactics and particularly by carrying out phishing attacks.
If you don’t want to become a recurring victim of cyber attacks, you have to prepare your workforce on how to not fall into the psychological trap of cybercriminals.
The In-House Data Safety Measures
Data is the currency of the online world. Therefore, it is logically the primary target of nearly every cyber attack. How you take care of your data definitely defines your preparation against any cyber attack. It will also eventually dictate how much you want to invest in insurance.
For instance, if you have a lot of data physically stored within the premises, then you become more vulnerable to the cases of forfeiture and loss of physical storage.
With cloud-based backups and encrypted in-house data storage with the top shielding of cyber insurance, you can effectively mitigate the brunt of a cyber attack.
The Legal Compliance
There are now dedicated cybersecurity and data protection laws in place. How your business complies with them also eventually affects your insurance needs.
Two Important Questions Regarding Cyber Insurance
At this point, we have a fair idea of what cyber insurance is and how it works. Nevertheless, there are still many things that need to be addressed. After all, cyber insurance is still a burgeoning domain in the vast landscape of the internet.
What Is the Cost of Cyber Insurance?
Like any other insurance plan, the cost of cyber insurance depends on the coverage you are asking for. A comprehensive cyber insurance plan that covers hardware repairs to data theft and notification systems definitely comes at a higher cost. Moreover, the insurance companies also factor in the track record of a company i.e. an organization with poor cybersecurity history might have to pay more in the premiums.
Do Individuals Need Cyber Insurance?
It is important to clarify here that cybersecurity is not just for companies and conglomerates. The need for cyber insurance actually depends on the relevance and significance of digital assets, and not on their owners. If an individual is dealing with crucial and theft-prone data, then he/she will definitely need cyber insurance.
The Criticism of Cyber Insurance
There are certain quarters that criticize cyber insurance because they think it encourages a laid-back approach towards internet security: Why spend and grind on improving your cybersecurity when an insurance plan can compensate for any digital screw up? This criticism is a bit unwarranted because we know that insurance in other domains doesn’t work like that. You don’t just leave your car unlocked out there in the open because it is insured. Similarly, signing up for a cybersecurity insurance plan doesn’t mean an organization will not take care of its internet security and digital assets.
Many insurers refuse to pay out if an insured entity doesn’t maintain the pre-requisites required to maintain bare-minimum security of its cyber infrastructure. So, cyber insurance is not going to undermine the importance of preventive measures against any cyber attack.
Cyber Insurance: The Inevitable Future of Cyber Risk Mitigation
It has been estimated that cybercriminals are going to steal more than 33 billion online records and data points by the end of 2023. Keep in mind that this number has been evaluated after factoring in all the existing cybersecurity measures and the one more likely to be introduced in the next four years. This forecast alone suggests that a cyber insurance plan is going to be the most sought-after commodity in the online world.