What is Cyber Insurance?
A cyber insurance policy is commonly called "cyber risk insurance" or "cyber liability insurance" coverage. It is a product that allows businesses to transfer the costs involved with cyber recovery from a cyber incident or similar event. Typically, the critical aspect of cyber insurance will be network security coverage. This coverage is leveraged in a network security failure, such as data breaches, malware, ransomware attacks, business accounts, and email compromises. However, the policy can also be used for liability claims and ancillary expenses of an attack or breach. The cyber liability insurance policy can also provide access to a panel of incident response firms, breach coaches, and other service providers specializing in cyber incidents. Some of the issues that cyber liability insurance typically covers include:
Data loss, recovery, and recreation
Business interruption/ loss of revenue due to a breach
Loss of transferred funds
Computer fraud
Cyber extortion
With cyber-attacks on the rise, many organizations worldwide are experiencing increased risk in their environments. However, although the risk is heightened, there are effective ways to deal with it.
The first way to deal with risk is to get rid of it together. This usually implies that an asset is no longer needed. For example, an EOL firewall or an old ERC system is no longer needed. This is a risk that the organization can get rid of without affecting the business.
The second way to deal with risk is to mitigate the risk. Companies will put controls in place to reduce the risk as much as possible. This could be implementing MFA in an environment or pushing out a policy on BYOD. This is putting a control in place to reduce the risk.
The third way to transfer the risk. This is wherein most cases where if the organization can not get rid of the risk and it will cost more to put controls in place than it would transfer the risk. This is where Cyber Insurance comes into place. Cyber Insurance should be part of every mature security program.
If your organization stores personal and sensitive information in a digital format, it would be in the company's best interest to obtain cyber insurance. This is because there are many types of data, and they are regulated in different ways. In addition, data exposure on the dark web could lead to stolen information and identity theft. As a result, the fee your organization could incur from penalties and lawsuits could be quite expensive.
Cyber insurance covers a variety of aspects of cybercrime. Depending on your policy, it may cover the costs of investigations, settlements, data recovery, business interruption, and legal fees. There are many insurance companies and policies to choose from in the cyber insurance market.
Why is Cyber Insurance important?
According to the latest data breach report by IBM and the Ponemon Institute, the cost of a data breach in 2021 is US$ 4.24 million. This is a 10% rise from the average cost in 2019, which was $3.86 million.
As we can see, not only are cyber-attacks on the rise, but the cost of the attacks is rising as well. To most companies, having to pay $ 4.24 million dollars could be devastating. Cyber Insurance is a way to transfer the cost of a cyber attack. Cyber attacks are not going away.
In today's digital world, Cyber Insurance is not an option. To have a mature security program, businesses need to have a Cyber Insurance policy to transfer the cost of a cyber attack.
We are here to help!
Are you looking for ongoing advisory services to assist in identifying vulnerabilities and security policies that should be in place and help improve your security posture? The team at Inception Security™ has been leveraged to enhance the security posture of fortune 100 companies, and small and medium-sized businesses. Our team has a depth of knowledge in the cybersecurity industry and will be able to provide value to your business right away.
Contact Inception Security if your company is looking for advisory services.