Home Finance A Beginner’s Guide to Cybersecurity Insurance: Important Things to Know

A Beginner’s Guide to Cybersecurity Insurance: Important Things to Know

14 min read
A Beginner's Guide to Cybersecurity Insurance: Important Things to Know

Did you know that experts say that damage related to cybercrime will hit $6 trillion annually by 2021?

The world of cybercrime is becoming more and more complex each year. This often leaves businesses in a vulnerable position. They may invest in cyber defense to avoid risking disaster should the worst happen.

Many are benefitting from taking out cybersecurity insurance. This is a form of insurance that protects companies should the worst happen. It may also provide financial protection in case the government fines you after a breach.

Could cybersecurity insurance protect you and your business? What levels of protection are available? Check out our in-depth review.

What is Cybersecurity Insurance?

Internet security companies provide consistent protection and education about threats. Yet, no coverage is watertight. New threats and human error mean that companies are under threat of attack.

Cybersecurity insurance can provide protection in case an attack is successful. The level of cover varies according to the agreement. It can include costs and liabilities, government fines, investigation processes, even litigation.

After an attack, there will be an investigation. It may require the expertise of a third-party specialist. They will create a forensic report regarding the attack. This will take time and is likely to be expensive. Companies who see this ahead of time and take precautions have a greater chance of survival.

Since Cybersecurity insurance is relatively new, many are currently not sufficiently covered. Others may have basic coverage but are relying on traditional defense methods. It pays all companies large and small to learn more about how cybersecurity can protect them.

Do I Need Cybersecurity Insurance?

The short answer is yes, all SME businesses need cybersecurity insurance. In the aftermath of an attack, most SME businesses will fold. Others survive by drastically reducing their activities. The only way to prevent this from happening is to have both cyber defense and cyber insurance.

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Are you a particular target for hackers and cyber terrorists? Ask yourself the following questions:

  • Does my organization hold large amounts of information?
  • Is this information sensitive in nature? Could litigation arise if a cyber attack steals it?
  • Do I conduct regular financial transactions that may be well known?
  • What are my current cybersecurity measures?

If you answer yes to these questions, you may need to investigate insurance.

How Can I Get Cybersecurity Insurance?

To know what level of insurance you need, you first need to understand your current premium. Your current insurance policy may already cover you in some aspects. Build on this premium and address the needs you will have should an attack occur.

Even if you quickly resolve the attack, any attack will result in you will still have downtime. You may choose to pay an amount of money to the attackers to regain access to your data. You may suffer litigation if thieves expose personal data. You may have to settle with companies who suffer loss as a result of the attack.

You may wish to have a retroactive coverage clause included in the policy. This will help if a hacker has had access to sensitive information for some period of time perhaps years.

The insurance company will want to know about your existing security precautions. This could range from company policies, employee education safety precautions regarding vendor management.

Understanding your current security position is important. After this, you will be able to explain it to the insurance company more easily. It will also help you to understand your company’s vulnerabilities.

Research What is Available

Before you finalize the insurance contract, ensure that you understand the conditions. This includes restrictions or requirements that the insurance company may impose.

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Ask questions and ensure that you receive clear answers. What coverage will the policy provide? If an employee connects a personal device to the network, is the company covered?

You may have to inform employees and other associates that you are now insured. It is good to educate employees about any new requirements.

You will need to establish how to contact the insurance company in the event of an attack. If an attack has locked down your system, you may not be able to use any internet-based communications. Further, the insurance company will need to be able to verify your identity.

In a perfect world, any attack will not be successful. Your business or organization will continue to grow. In this case, it is important that your insurance is scalable. Your policy should expand to cover your growing ambitions. This may include the number of workers, locations or even countries.

The Most Important Thing to Remember

Cybersecurity insurance is important as part of a larger defense plan. However, they should always consider insurance as a second safety net. Companies should take measures to avoid using insurance if possible.

An extensive security plan should involve protection against current forms of attack.

Organizations should educate employees about Social Engineering and Phishing. they should explain the dangers of introducing storage devices to the company network. These are common non-technical ways to obtain passwords and information.

Cybersecurity Insurance and Much More

In today’s dangerous cyber world it pays to educate workers about the dangers that exist. Trustworthy information is your best defense.

If you are looking for information about cybersecurity security or any other technical topics, we are here to help.

We leverage our own experience and research to provide reliable guidance. This may be regarding technology or any other lifestyle subject. Why not check out our blog to see how we can help you.

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