There’s More Than One Type of Cyber Insurance – Not to Scare You This October
As global technology becomes more accessible (especially since ransomware is being sold as kits on the dark web) the rate of cybercrime has increased as well. Insurance companies have been able to identify the upward trends in cybercrime, increasing the insurance rates and adding complexities to different policies so they are harder to enforce. So if your business handles, transmits or stores sensitive data, the first thing you should know is about getting the right cyber insurance for your business.
Cyber insurance is a tool businesses carefully consider to protect themselves from the financial losses suffered after unfortunate events like data breaches, cybertheft and ransomware. In 2022, the average cyber policy can cover a variety of things, and can protect the company at length – but also requires the business to put in place and maintain certain security measures. These measures are usually required as a way to reduce the probability of attack, but just missing one may mean the whole policy is unusable when a business actually needs it.
Small businesses frequently lack the money or network support of large corporations, which can leave franchises especially vulnerable to cyberattacks. These attacks can seriously damage smaller businesses, especially if the attack targets critical infrastructure or harvests the company’s credit card data. Since small businesses are more likely than most to be the victims of cyberattacks that can compromise their data and networks, cyber insurance is a key component to continue business operations.
Before we go into the different types of coverage, let’s go over some cyber insurance assumptions and why you shouldn’t let them get the “scare” on you!
Assumption: Just any cyber insurance plan will protect your business
This could not be further from the truth. Your insurance provider will only pay for your insurance if they believe you meet the criteria outlined in your contract. There is a likely chance that if they don’t think you have been doing everything necessary, they may reject your claims and not be forced to pay.
One of the most common requirements for insurance policies is that you have strong cybersecurity protection since some of the threats remaining are more advanced that others. However, keep in mind that not all cybersecurity solutions are equal and need to find one that offers protection depending on the challenges that you might be facing.
Assumption: I have cybersecurity, I don’t need cyber insurance
Even though cybersecurity solutions may bolster your network defenses, they still can’t prevent you from being the victim of a cyber attack. The effectiveness of cybersecurity software depends on the level and complexity of your configuration, as well as doing regular checks to ensure everything is working properly. Human error can also result in vulnerabilities in a system regardless of how secure it is. That’s why it’s a good idea to have a cyber insurance policy in place to fall back on in case of an incident.
However, no solution can provide complete protection against all threats because staying on top of emerging risks can be challenging, and new vulnerabilities are exposed every day in the cyber-world. Insurance carriers cannot change their policy every time a new issue is revealed, which is why it is best to have both cybersecurity to reduce the chances of being breached, and cyber policy for after breaches have already occurred.
Assumption: Insurance companies give everyone cyber coverage
As technology advances, so do the occurrences of cyber incidents. But with small and medium-sized business being the targets of most cybercriminals due to a lack of enterprise-level protection, the likelihood of an attack is high. The sooner technology advances, the higher the likelihood of cyber incidents. That’s not only a frightening thought; unfortunately, that’s practically a fact. With small and medium-sized businesses serving as the most frequent targets, we’d all be wise to increase our protection.
Assumption: Cyber policies cover everything when it comes to an incident
Well, no. If you are not able to prove that your cyber insurance policy prerequisites, whatever your loss might be, your claim is likely to be left in the cold. Then you may want to think about partnering with an IT service and support company. Finding an expert IT service provider can be pivotal to remaining compliant with your cyber insurance policy and providing evidence of such compliance.
Here’s different types of cyber insurance and what they cover:
Although insurers may have their own specific classifications, or slightly different terminology, cyber insurance can be broken down into roughly three different categories.
Cybertheft insurance can help businesses in situations involving theft of data provided by technology. Such scenarios include various types of confidential data, including first party information, computer fraud and computer extortion .The prospect of cybertheft is of constantly rising concern to businesses of all sizes as data volume continue to rise. Thus insuring against cybercrime is critical to protect the assets of a business.
All businesses, big or small, can be a victim of cybercrime and no business is too small for cybertheft insurance. So, taking into account even a remote chance of data and digital assets being stolen, ensure you are covered from cybertheft with a cybertheft insurance policy.
Cyber liability Insurance
Cyber liability insurance insures against third-party mistakes that damage run-off the business, including data breaches, regulatory penalties, credit monitoring and lawsuits.
Cyber liability insurance is an essential tool for small business owners like yours because the impact of a cyberattack can be severe, and the business may not be able to handle the damage. This does not mean you should panic right now; it simply means that having cyber liability insurance can help your business recover and move forward even after a breach, and that too many people believe risk factors for a cyberattack are not applicable to their companies.
Cyber extortion/ransomware Insurance
Cyber extortion insurance offers protection and access to cyber extortion services. This insurance can help with ransom payments, recovery expenses, business interruptions and more. It also provides access to cyber extortion experts who can help you negotiate with hackers and provide expert forensics.
Keep in mind that an attack could still succeed even with best cybersecurity solutions to protect your business. That’s why it’s critical to have cyber extortion insurance. It can help you recover from a ransomware attack and reduce the financial impact.
Let’s work together!
The cyber insurance industry can be complicated and daunting to navigate. There are many factors that can influence whether or not you qualify for a payout in the event of a cyberattack, and trying to remain compliant with your insurance policy can be difficult.
A good IT service provider can help you understand how to protect yourself from hacker attacks and other security breaches so that you have a greater chance of gaining complete coverage.
Not sure where to start? Contact us today to schedule a consultation. Our knowledge and experience may be just what you require.