As cyber threats become increasingly more sophisticated and frequent, it’s important for organisations to consider purchasing cyber insurance (also known as cyber liability or cyber risk insurance) as a means of mitigating the risks associated with cyber attacks. Below, we’ve listed some practical advice for businesses looking to purchase cyber insurance.
What is cyber insurance?
Cyber insurance is a type of insurance policy that provides financial protection to businesses in the event of a major cybersecurity attack or data breach. This can include coverage for costs associated with investigating and remedying the incident, notifying affected individuals or regulators, and defending against legal claims.
This type of insurance also supports the business during its recovery. If your systems are hit by ransomware, for example, your insurer may cover the costs of hiring consultants and forensic investigators to help you determine how and why the attack happened. They may also cover any costs associated with restoring data lost in the incident, such as paying for new servers or devices depending on your agreement.
If your company has been attacked before or regularly struggles with security issues, then cyber insurance might be useful in helping you improve your overall security setup. This way, another attack is less likely to occur in the future. Whilst most plans offer similar benefits, every policy is different, so make sure that you read over the terms and conditions before you purchase any form of cyber insurance.
Why purchase cyber insurance?
The costs associated with a cyber attack can be significant, including lost revenue, damage to reputation and regulatory fines. Cyber insurance can help businesses to mitigate these risks by providing financial protection and assistance in the event of a cyber incident.
It goes without saying, but cyber attacks can be devastating for a business. For instance, if you lose access to your software or hard drives due to a virus or malicious attack, your data and files might not be easy to replace or restore. In this case, your company could suffer greatly in terms of downtime, profits and reputation, so having insurance could be essential for getting back on track. Similarly, if a hacker gets into your business bank account and steals a large sum of money, this can also be covered if you have a good insurance plan.
If your company doesn’t have insurance, you could end up in serious debt, which can force liquidation in worst case scenarios. It’s common for business owners to think that something like this will never happen to them, but these types of attacks are only going to get more advanced, so paying an annual or monthly premium for cyber insurance is worth the peace of mind it can bring.
What does a typical cyber insurance policy cover?
A typical cyber insurance policy will include coverage for the following:
Data Breach Response
This coverage includes expenses associated with notifying affected customers, restoring systems and data and hiring forensic experts to investigate the cause of the breach.
Business Interruption
This coverage compensates businesses for lost income and any additional expenses incurred as a result of a cyber attack that disrupts operations.
Cyber Extortion
This coverage offers protection against cyber criminals who threaten to release sensitive information unless a ransom is paid.
Privacy Liability
This coverage provides protection against claims of privacy violations, such as the unauthorised disclosure of personal information.
Media Liability
This offers protection against claims of defamation, libel or copyright infringement that may arise from online activities, such as social media posts or website content.
Network Security Liability
This coverage provides protection against claims that arise from security breaches that result in damage to third-party networks or systems.
What should businesses consider when purchasing cyber insurance?
When buying cyber insurance, you should first assess your specific risks and coverage needs. This can include assessing the type and amount of data your business holds, the potential impact of a cyber incident on the company and any regulatory requirements in your industry.
It’s also important to carefully review the terms and conditions of any cyber insurance policy, including coverage limits, deductibles and exclusions. Make sure you do your due diligence and look into the reputation and financial stability of the insurance provider you choose.
In addition, you need to ensure you have appropriate security measures in place to reduce the likelihood of a cyber attack, like firewalls, encryption and regular security audits, as insurers may require evidence of these before offering you a policy.
Different Coverages, Different risks
While most providers will provide the same basic coverage, you can add and remove extras based on your specific business needs. If you store a lot of customer data, for example, you may want to purchase additional customer data insurance, which will provide greater protection in the event that personal details are stolen from your servers.
If you have developed intellectual property that is unique to your business and it’s stored on your systems, then IP insurance might be worth considering as well because financial damages caused by IP loss aren’t usually covered as standard.
How much does cyber insurance cost?
The cost of cyber insurance varies widely based on a number of factors, including the size of your company, the type of business you operate and the level of coverage you need. Other factors that can impact the cost include the amount of valuable data you store, the security measures you have in place and your claims history. However, most policies start from around £200 – £300 per year and can cost significantly more for bespoke cyber insurance packages.
Final Thoughts
Cyber insurance can be an important tool for businesses looking to mitigate the risks associated with a cyber attack. However, it’s important to carefully assess your specific risks and coverage needs, review the terms and conditions of any policy, and ensure you have appropriate security measures in place. By taking these steps, you can better protect your company in the event of a cyber incident.
Why choose Eventura as your cybersecurity partner?
With over 20 years experience in cybersecurity, we know our stuff. Our team of cybersecurity experts can complete a full audit of your business and identify any areas of weakness, which could leave you vulnerable to cyberattacks.
We were even mentioned in the Governments National Cyber Security Centre (NCSC) Annual Review 2020 when we were chosen to test their “Exercise in a Box” designed to help small businesses prepare and respond to cyberthreats. You can read the article here.
There is a common misconception that cyberattacks don’t happen to SMEs but this couldn’t be further from the truth. With our expert knowledge, we can help you protect your business’s future from the ever increasing threat of cybercriminals.
If you would like to speak to one of our cybersecurity experts or request a cybersecurity audit, you can request a free call back here.
