What is cyber insurance and who benefits?
Cyber security insurance, also known as cyber insurance, is an insurance product that allows businesses to transfer the risk of cybercrime activity, such as data breaches and cyber-attacks while protecting the organization from internet-based threats.
The threats affect organizations like IT Infrastructure, information policy, and information governance, which are often covered by traditional insurance products and commercial liability policies.
Hence, the coverage works by covering the losses of these organizations that may suffer as a result of a cyber-attack. Read this article to understand how to take advantage of this coverage.
How does Cyber insurance work?
The coverage works similarly to other forms of insurance. Policies are sold by different employers that provide insurance, such as life insurance, liability insurance, property insurance, and collision insurance.
More so, the policies in this insurance usually include first-party and third-party coverage. The first-party coverage deals with losses that directly affect the insured organization, while the third part deals with losses that affect other entities with which your insured organization may have built a business relationship.
A good example of first-party coverage is when a company experiences a cyber-attack or data breach that results in financial loss or data recovery cost; the first-party coverage will cover the direct impact on the company.
In the case of a third party, the insured organization would help cover the cost of the losses based on their relationship with the client if there is a data breach or the client’s data is being compromised.
Most importantly, the coverage helps the insured company pay for any financial losses it may incur in the event of a data breach. It also helps them cover all costs related to the repair process, such as legal services, customer refunds, investigation costs, and crisis communication.
When to expect cyber insurance coverage
- When you have a business email compromise due to private information’s shared.
- Distributed denial of attack that brings down your network
- Infringement on media liability and other content that is electronically disseminated
- Some losses due to social engineering and fraud on you or your employees
- When your business profit gets lost due to reputational damage on your brand through a publicized cyber attack
- Malware infections spread through devices connected to your network and make it impossible to operate.
Benefits of Cyber Insurance
To protect your business from losses, the cyber insurance policy will cover you from the following:
Cyber extortion: The cover protects your business in the event of malicious attacks to seize control of access to your operational or personal data until a fee is paid.
The policy will reimburse the ransom amount demanded by the attacker, together with the consultant fees used to oversee the negotiation and transfer of funds while solving the request.
Cyber Forensic support, also known as (Post-incident support): Provides your business with rapid 24/7 support from cyber specialists recommended by your insurer. The specialist will access your system, identify the source of any breach, and equally suggest preventive measures.
Liability cost: The insurance covers when someone brings a claim against your business for slander, defamation, or infringement of intellectual property rights.
Operational disruption: If there’s a failure due to an interruption from a cyber-attack on your business operation, your loss will be covered by the income during the period of interruption. This is a safety net while you wait to recover your normal work pattern.
Damage to digital assets: The cover protects your business from damage to digital assets, including your websites and photos. It protects them against loss, corruption, misuse of computer systems and programs, and alteration of data.
Proactive support: You will be assisted with managing your cyber risk and preventing cyber incidents by offering access to cyber security experts and threat intelligence services that conduct IT vulnerability assessments and password management while offering staff training on cyber security.
What is not covered
- Damage or destruction of physical company property, even when it holds sensitive data
- The loss of potential future company profit
- Loss in organizational value due to theft of intellectual property
Generally, Just like another type of insurance, the coverage often requires organizations to prove they’re taking precautionary measures to protect their network against threat actors.
Conclusion
To conclude, as cyber threats continue to increase, your business must take steps to implement strong cyber security. It’s advisable to protect your business from cyber threats by getting coverage for data breaches, ransomware attacks, etc.
