Cyberattacks can result in gigantic problems for organizations, as a result, many businesses are turning to cyber insurance. This alleviates some of the damage caused by these attacks. The impact of a security breach can be categorized into three categories: reputational, financial, and legal. What do we know about cyber insurance, who may need it and what will it cover?
Cyber insurance is just what you would expect, insurance limited to help businesses shield against any potential destructive effects of cybercrime. To protect companies against the fallout from distributed denial-of-service (DDoS) attacks, ransomware, malware, or other illegal methods that may be used to compromise sensitive data or networks. This is also known as cyber liability insurance; this kind of insurance helps organizations mitigate specific cyber threats. With the ever-increasing amount of personal information and money being exchanged online daily, cybercrime cannot be disregarded.
However, there are items that cyber insurance cannot protect against. Businesses will need to ensure that they understand what will not be covered when buying a cyber insurance plan. While having some form of cyber insurance is a good backup, an organization is also responsible for its own cybersecurity posture. Cyber insurance does not guarantee that it will solve a businesses’ cybersecurity issues or prevent any cyber-attacks, businesses will still need to ensure that they are mitigating risks and closing potential security holes within their applications and infrastructure.
Do you need Cyber Insurance?
Businesses that have an online presence and store personal or financial data would benefit from cyber insurance. Personal or financial data would include customer contacts, personal identifiable information (PII), customer sales, credit card numbers and intellectual property, or any sort of sensitive information are lucrative targets for any cybercriminal.
Attacks also can potentially sabotage a network with ransomware. A cyber insurance policy that covers threats like ransomware could go a long way to helping businesses that fall victim to these attacks.
What does it cover and does not cover?
This is an issue many organizations need to ponder upon and discuss with their cyber insurance policy provider. Most cyber insurance plans cover a range of cyber risk losses that are unforeseen. Also, some insurance plans cover business income loss or physical damage to hardware. Cyber insurance plans can be tailor-made as per the need of the current business security position.
Different cyber insurance companies offer various levels of coverage. However, most major insurance companies offer various cybersecurity insurance policy options. The customer can select the plans depending on the type and price of the policy. Generally, the insurance coverage will probably cover the immediate costs due to falling victim to an attack. Customers can customize the threats and risks to be covered under their cyber insurance policy, whether it would be malware, ransomware, or DDoS attacks.
Many Cyber insurance policies exclude security issues caused by human error, such as careless mishandling of digital assets, poor configuration management, infrastructure failures not caused by cyber-attack, preexisting breaches (attacks occurred before the policy was in place, possibly due to a zero-day exploit) and failure to amend a known vulnerability, to name a few.
Due to cyber insurance being new to the market, the policies will differ widely from one provider to another. To select a policy provider, organizations should thoroughly research the policy details, verify it contains all the necessary coverage and protections that they desire. Also, companies should gauge whether cyber insurance policies offer protection against emerging and known cyber attacks and threats.
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