Your company’s server has just been hacked and important customer data and credentials have been stolen. Or your network-critical business was one of those infected with ransomware and the attackers are demanding outrageous fees before they can let go. The good news is that none of the above scenarios happened, it is just an April fool prank story, right? Well, it is, but will it always be just a story? No one knows.
That is why you need to think strategically about your business assets. As the business world progresses further into the digital era, more and more assets are being connected to the internet further increasing the risk of cyber-attacks and breaches. These attacks can be detrimental to your business. Most of the time, the effects of a successful attack are too devastating to recover from. It is for this reason that a cyber insurance policy is a necessity for your business.
What Is Cyber Insurance?
Cyber insurance is an insurance product that aims to protect organizations and individual users from Internet-based risks, and any other risks relating to information technology. This insurance covers an organization from a variety of issues related to cyber incidents such as data breaches, related costs, fines, data loss and destruction, and interruption costs in case revenue is tied up to an event. Cyber insurance is also designed to protect businesses engaged in e-commerce or those that create, process, or store user data.
How Can Cyber Insurance Help?
If your company stores its customer’s details digitally or accepts credit card payments, it is at risk of being hacked. For small businesses, attackers may try to compromise your point of sale system or steal customers’ payment details through hacking. Unfortunately, these are not the only vulnerabilities, lost laptops, employee theft, and email phishing are just a few other ways you can lose your customer’s confidential information.
With this in mind, it is easy to see that investing in cyber insurance is a wise decision that can help cope with potential risk.
Cyber insurance can help your business in the following ways:
Business Continuity: Cyber protection protects against abrupt disruption of business activity due to network breach. For instance, if after an attack your company was about to undergo a disruptive security incident, having cyber insurance would help by keeping it operational to avoid loss of revenue.
It is Cost-Effective: Security breaches are expensive. A single breach can cost thousands or millions of dollars in business losses, investigation costs, costs of informing your customers, identity recovery costs, costs of restoring data, malware detection software, legal settlements, regulatory fines and attorney’s fees. Most businesses cannot handle these sorts of expenses. Fortunately, this is precisely the type of predicament cyber insurance helps you with.
Faster Recovery Time: Cyber insurance provides a smooth funding mechanism in case your company suffers a security hack or breach and need to settle a claim or ransom. It helps to recover from significant losses and reduces the need to wait for law enforcement intervention, enabling you to return to normal business activity within a short period.
Having a cyber insurance policy should not take your focus away from securing your business network and data. Even though cyber insurance can cover you in case of a breach, you still need to take adequate steps to protect your company’s digital system as well as follow best digital security protocols. Just like any other insurance, cyber insurance companies cannot pay out if a company does not protect their networks.
Factors To Consider When Buying Cyber Insurance
When looking to buy a cyber insurance policy, you are advised to research and educate yourself on the preferred policy. Take the time to find out the different types of incidences covered by the policy and if there are any specifications excluded from the coverage. Just like any other insurance policy, some incidences may be excluded from the policy by some cyber insurance claiming that they are deemed risky.
You should also consider a provider with experience and one that is willing to change as cyber threats evolve, remember that cyber security is dynamic and keeps changing.
No matter how secure you think your business is you will be living in a fool’s paradise if you think it is unbreakable because there is no 100% security guarantee. Interested in learning about how investing in a cyber insurance policy can benefit your business? We can help answer your questions, click here to contact one of our team members.