In 2020 alone, one in six businesses that faced cyberattacks fell victim to ransomware. Of those, around half paid the ransom to continue their business. Were you aware that there is a way to avoid such losses and protect your company from cyber-attacks should you ever face such a situation?

This article will delve into cyber insurance and help you understand how it can protect you and your business. By the end, you should have enough information to determine whether or not it can benefit your business.

What Is Cyber Insurance?

With so many kinds of insurance available, it is important to know what each entails. Cyber insurance exists to protect companies from events that affect their IT infrastructure. Policies related to cyber insurance often offer compensation when a company needs money to cover the following:

Liability

This prevents the company from needing to cover legal costs or claims related to any cyber incident. These might include:

• Prosecuting a case
• Legal defense
• Settlements
• Court judgments

Cyber-attacks can be damaging and cause issues such as contractual breaches or other regulatory issues. Liability protection allows a company to continue without responding to all cyber threats when they appear.

Business Interruptions

An incident could cause your business to stop operating. This could be due to a strong ransomware attack and many other possibilities. This insurance can provide coverage during that time.

This will include compensation for any income you lose and expenses you need to pay to get your company back up and running.

Reputational Damage

You will likely lose some of your reputation when you fall victim to a cyber-attack. This may be due to data breaches, a slowdown in customer service responses, or many other results.

This type of insurance can help you pay for any public relations repair service. It can help you restore your public image and ensure you retain the trust of any customers.

Computer Forensics

Business owners who suffer a data breach should respond to it by resolving the current issue and stopping it from happening again. 

By investigating the data breach, including by engaging in computer forensics, you can learn more about how it occurred to start with. Then, the next time, you can mount a much better cyber defense against anything that might occur.

What Risks Might Demand This Insurance?

You need to be aware of many different types of attacks in this day and age. Many of them can impact your day-to-day operations or even cause a significant dent in your profits. Some examples include:

Data Breaches

There are a wide range of ways people could instigate a data breach. In short, they refer to when unauthorized persons gain access to data they should not have. 

Information, such a person might try to steal would include financial, employee, customer, or strategic data. Should someone malicious access these files, your customers could become the target of identity theft or fraud. As such, they would likely take legal action against you.

Ransomware Attacks

Ransomware is a piece of software that encrypts a company’s files. When it does this, it offers a way to decrypt the data, usually by paying large sums of money to a specific account. 

This is detrimental due to the loss of business when you cannot access the file and even when a decision is made to pay the ransom to the criminal, there is no guarantee they will receive their files back in the state they lost them nor is there any guarantee they will not sell your data.

Social Engineering

This is not a type of breach that involves advanced technological prowess. Instead, it revolves around tricking your staff. A social engineer causes people to share data about a company they can use to access confidential information.

Access to this information means the engineer can use it to cause financial losses for you. Also, any data breaches resulting from someone simply receiving information via email are as harmful as any other.

Business Email Compromise

This type of scam is where people pretend to be powerful individuals in an organization. They email others within the company to deceive them into revealing internal information or sending them money. Of course, one of the main losses from this attack is financial, although it can also lead to a lack of customer trust.

Non-Compliance with Regulations

You could become liable if you do not follow such regulations as Europe’s GDPR or the California Consumer Privacy Act. Cyber insurance allows you to follow up on any failure to enforce these laws by covering any losses from fines or legal cases that occur as a result.

Third-Party Vendor Breaches

Instead of breaches due to your own company’s actions, a third party could fall victim to a malicious actor instead. You should set up coverage as there is rarely anything you can do to protect yourself against such a situation. This puts as much control in your hands as possible.

How to Tell If You Need Cyber Insurance

You should always perform a cyber risk assessment as part of a risk management audit. This can inform you if you need to pick up cyber insurance by showing you where you might be most vulnerable. Examples of things that would flag you as needing insurance include:

• Having a large company with high profits
• Collecting and storing large amounts of data
• Relying on technology for your processes
• Not having the resources to handle cyber risks

Even if you implement powerful cyber defenses, you should consider insurance. There are always ongoing advancements in technology that cyber criminals will leverage. If you can only sometimes stay ahead of the curve, you can at least cover yourself when you fall too far behind.

Choosing the Best Cyber Insurance

With all the above in mind, there is every chance you are now searching for a cyber insurance policy to fit your needs. We can work with you to ensure your company has the coverage it needs to ensure continuation, no matter what happens.

Our specialists are ready to talk if you want to know more about cyber liability and how we can help you. So, pick up the phone and call us today to find out more.