What is Cyber Insurance?
Cyber insurance (also cyber risk or cyber liability insurance) is a form of coverage designed to protect your business against threats in the digital age, such as data breaches or malicious cyber hacks on business computer systems.
A business is responsible for its cyber security, but in the event of a cyber-attack, having the right insurance means you are not alone. Cyber liability coverage will provide critical support to help your business stay afloat.
So how does cyber insurance work and what kind of cyber insurance do you need? Read our complete FAQ guide for an introduction to this topic.
What does cyber insurance cover?
In the event of a cyber-attack, most cybersecurity insurance policies will cover first and third-party financial and reputational costs if data or electronic systems are lost, damaged or stolen.
For the involved business – first party – coverage includes the costs of investigating cybercrime, recovering data lost in a security breach and restoring computer systems, loss of income resulting from business shutdown, reputation management, extortion payments demanded by hackers and notification costs if you are required to notify affected third parties.
Third-party coverage (arising from claims against you) includes damages and settlements, as well as legal defence costs against claims of GDPR (General Data Protection Regulation) violations.
Who needs cyber liability insurance?
If your business uses, sends or stores electronic data, you can benefit from cyber insurance. Such data, whether it is sensitive customer data or belongs to the company, is vulnerable to cyber-attacks and data breaches. Cyber insurance can help with recovery costs.
This is why cybersecurity insurance is an important part of small business insurance, as it offers financial support if the worst happens.
How much does cyber insurance cost?
The cost of cyber insurance depends on several factors, including the company’s annual revenue, the industry, the type of data being stored and the level of network security. Certain sectors are more vulnerable to cybercrime and will therefore require a higher level of coverage.
For instance, companies with numerous personal files, such as financial and medical, are exposed to greater risk than sectors such as hospitality.
The best way to find out how much it would cost to cover your business is to request an online quote for cybersecurity and data insurance.
What are Common Cyber Crimes?
Unfortunately, even some of the most tech-savvy individuals can fall victim to cybercrime. While there are numerous types of criminal activity that occur online, there are a few common cyber crimes you should watch out for:
Malware (malicious software)
A form of malware which can install itself on your systems through phishing scams and exploiting software vulnerabilities. Once installed, an attacker can spy on network activity and steal private information
Ransomware
This is a form of malware that attacks your computer system and encrypts data. The attacker will then demand the payment of a ransom in exchange for the return of the data. It is worth preparing a data recovery plan as a precaution and maintaining at least one data backup.
Hacking
Cyber hacking is a term used to partially or completely take over a computer system or some of its functions. There are different methods for doing this, but the goal is generally to access important data.