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There is no denying that we are susceptible to cyber attacks in today’s internet-driven world. Since cybercriminals continually develop new ways to exploit technology, most of us have no idea what to do. Cyber insurance is the comfort we are looking for amid all of this. It is a great option to shield a company from online threats. This blog post will examine the what, why, and when of cyber insurance. Along with finding out the current status of the cyber insurance market and why, despite the increased demand for cyber insurance, finding coverage is becoming more difficult for companies. Did you know that the cost of cyber insurance increased by 110% in the last quarter of 2023? More such facts and revelations await you.

What Is Cyber Insurance?

Cyber insurance, also known as cyber security insurance or cyber liability insurance, is a product that covers financial damages brought on by cyber attacks. Cyber insurance covers costs related to damaged computer systems, lost revenue, legal bills, and other cyber attacks. One can draw similarities between car insurance and cyber insurance. Much like vehicular insurance covers damage to vehicles and personal harm in the event of an accident, cyber insurance covers the damages to an organisation in case of a cyber incident.

According to reports, web-based cyber attacks affect 64% of businesses, and phishing and social engineering attacks affect 62% of them. An organisation is more likely than not going to experience some cyber attack. This is where cyber insurance comes to an organisation’s rescue. It is a crucial component of risk management for firms nowadays since it can decrease the financial effect of these breaches.

Why Is Cyber Insurance Important?

Cyber attacks are a real threat to any business that uses technology or stores customer information, which, quite frankly, is most enterprises. Cyber threats are unavoidable, but efforts can be made to lessen their impact. When asked global business leaders, 57% of them deemed cyber attacks as inevitable. Now, conventional business insurance policies usually do not cover damages resulting from cyber incidents, making businesses susceptible to the financial burden of cyber crimes like ransomware attacks, business email compromise schemes, etc. The monetary cost of these attacks is tremendous. Cyber insurance policies emerged to bridge this very coverage void. Cyber insurance can help businesses limit damage, recover more quickly, and increase their overall resilience by covering ransom payments, virus removal, and other charges.

Types of Cyber Insurances

Purchasing cyber insurance can assist companies in covering their financial losses in the case of a cyber attack or data leak. Additionally, it helps companies settle any expenses associated with the remediation process, including paying for the investigation, crisis management, legal counsel, and customer refunds. Usually, a variety of coverage options are available when it comes to cyber insurance. You can customise the coverages to meet your business’s unique risks and have the best policy for you. The common types of cyber insurance are mentioned below:

1. Network Security Liability

Network security coverage is crucial for most businesses, including those with information and privacy risks. This part of cyber insurance protects your company against network security breaches, ransomware attacks, malware infections, data breaches, and corporate email compromises. These kinds of attacks are expensive and widespread. Policies for network security responsibility are crucial for preserving continuity and reducing the monetary losses brought on by breaches.

2. Privacy Liability

Organisations that deal with sensitive employee and consumer data must have privacy liability coverage. This policy shields the company from liability arising in a data breach exposing personal information. In case of a data breach, your company will be shielded concerning its financial costs and any violation of privacy regulations. Privacy liability insurance comes in very handy for organisations dealing with sensitive information.

3. Media Liability

Media liability insurance guards against damages resulting from infringement of intellectual property rights, defamation, and other incidents of the publication of content on digital media. This kind of cyber security insurance coverage protects against the financial and legal consequences of content-related liabilities. They are a godsend for companies engaged in digital media, content creation, and publication. With the exception of patent infringement, this insurance guards organisations against violation of intellectual property.

4. Network Business Interruption

This kind of insurance can assist in recovering lost revenue, fixed costs, and any additional expenditures associated with the occurrence of a cyber breach if your business depends on a network to function. Policies for network business interruptions reduce the impact of operational cyber risks for an organisation. This incident might be a straightforward system malfunction, such as an unsuccessful software patch, or a security lapse, such as an outside hacking effort.

5. Errors and Omissions

A cyber incident can prevent you and your organisation from delivering on promised commitments to your clients. In such situations, the errors and omissions policies step in to protect your company from the costs of said delivery failure. E&O covers the claims against you and your organisation for negligence and breach of contract in case of a cyber incident. These claims can include technological services, consulting services, or services provided by professionals like lawyers, doctors, and engineers.

What Comes Under Cyber Insurance?

The harsh reality of the world we live in is that every company or business today faces the risk of cyber attacks. The dangers that you might encounter can range from data privacy risks to operational risks. Irrespective of the size and industry, no one seems to be safe from the cyber wrath of these notorious criminals. So, cyber insurance serves as the cushion that makes your company’s landing after a cyber hit safer. But like every insurance policy, cyber insurance also has its advantages as well as restrictions.

The most important question here is what is covered under cyber insurance; well, here goes the list:

• Financial support after a data breach
• Coverage of legal fees
• Assistance in covering the cost of compliance
• Reimbursement for business interruption
• Covers the cost of identifying and notifying affected customers
• Strong backing about cyber extortion
• Cooperation in undoing the reputational damages

And to be very clear, this is not an all-exhaustive list; depending on your policy, these coverage claims can change. Moving on to what is not covered by cyber insurance? An insurance carrier won’t pay for a past breach, and they will also not cover the cost of hardening your security measures post-breach. Typically, insurance doesn’t cover the cost of a breach caused by employee negligence or insider attacks. Furthermore, if an attack is caused due to failure in fixing a discovered vulnerability, you won’t be protected. Any failure of infrastructure caused by factors other than a cyber breach will also not be covered. Now, you are well aware of the assets and liabilities of cyber insurance. Make an informed decision for your organisation and take all possible measures to enhance your cyber defence.

Our Take on Cyber Insurance

Cyber insurance is a crucial component of every tech-based organisation. Still, it is in no way a replacement for cyber defence. Cyber risk management is still essential and should never be replaced by cyber insurance. It is a must for all businesses, but you should only think about getting it to lessen the harm that could result from a cyber attack. Your cyber insurance policy must complement the security procedures and tools you use as part of risk management. Moreover, you may find that you are not eligible for cyber insurance or may have to pay a higher premium if you do not invest in suitable or efficient cyber security solutions for your firm. Now you can argue why go for cyber insurance at all if you have cyber defence. Well, the answer is simple. Cyber insurance will assist in shielding your company from the monetary damages brought on by a cyber security incident. You’ll also feel more at ease knowing you have protection if something unfavourable occurs. By customising the policy, you can ensure you’re receiving the most value for your money and discover the ideal coverage for your needs.

GoAllSecure can evaluate the cyber security posture of your organisation and assist you in creating the perfect cyber insurance for you. Remember, a strong security posture makes it possible for your business to get more excellent coverage, and we can help you achieve both. We can help you navigate all the details and protect you and your organisation from cyber threats. We can support you in implementing the best cyber defence and picking out a perfect cyber insurance policy. For more information about us, kindly call us at +91 85 2723 7851 or +44 20 3287 4253.