The need for cyber-insurance coverage by businesses cannot be stressed enough in present times. Also known as Cyber Liability insurance, your cyber-insurance coverage can offer coverage against financial losses, among other associated costs, in the event of a cyber-attack.
While the cyber risks are likely high in sensitive sectors such as healthcare, financial services, research facilities, and governments, all forms of businesses, including retailers and e-commerce sites today, are vulnerable to the threat of cyber-attacks regardless of their size and scale of operations.
In the face of increasing cyber-attacks, companies across the board have upped their focus on cyber-security measures. One such move is purchasing cyber-insurance protection.
Are you unsure about getting cyber-insured? If yes, consider the following reasons why you should get cyber-insurance protection for your business.
Data is the new oil. And every business is now in the business of collecting and using data to drive business decisions and operations. Unfortunately, the sheer size of data collected today is staggering ' a fact that makes businesses extremely vulnerable to cyber-attacks. And hackers and cyber-criminals are acutely aware of this vulnerability.
The worst thing that can happen in today's data-driven ecosystem is a cyber-attack. And no business is completely protected against a cyber-attack ' even with stringent cyber-security measures in place. For this reason, getting cyber-insurance protection can beef up your security cover.
Smart devices significantly increase the attack surface since most of us store important data on our smart or portable devices. As a result, businesses with a 'bring your own device' (BYOD) policy need to be vigilant since these devices are used on-premises, making them easy targets for hackers and cyber-criminals. In addition, employees using their own devices often use their devices for work purposes, and as such, their devices hold sensitive data.
Your cyber-insurance policy can offer you the needed coverage vis-'-vis losses incurred if the device is subject to a virus/malware attack or even if the device is stolen or lost. Additionally, insurance providers ask for certain technical prerequisites, such as implementing multi-factor authentication. Such requirements force companies to improve their cyber security risk posture.
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There are typically two motives for any cyber-attack ' one is data theft, and the second is to cause financial damage.
A cyber attack can deal a deadly body blow to your business. If your data is compromised, it can cause business instability since customers will quickly want to move away from your business. With the loss of trust, you could suffer extensive business revenue losses. If you don't have cyber insurance, the damages could potentially bring down your business.
On the other hand, having cyber insurance can help you tide over these issues and challenges since it offers coverage against business losses caused by cyber-attacks.
Furthermore, it can help you address your cyber-attack situation faster and help you get your business operations back on course.
A cyber-attack can lead to business disruption ' something that your business disruption policy is not equipped to handle. Most companies don't have an incident playbook, and then this could become a nightmare situation for your business.
Your cyber-insurance policy can play a critical role since these are specifically designed to offer coverage and access to experts to deal with business disruption.
Furthermore, Your business could be slapped with fines, penalties, and notification requirements for data breaches or theft on the legal front. Depending on which state you operate in, your business will be impacted by breach notification laws. Most laws require you to offer a written notification to individuals who have been potentially impacted by a data breach. This process can be complex and expensive, but if you are cyber-insured, then these costs will be covered under your policy.
Your cyber-insurance policy will also cover the cost of managing public relations and your brand reputation in the wake of a cyber-attack and potential data loss.
Data restoration and rectification in the event of data damage or theft are not covered under a standard business or property policy.
In contrast, your cyber-insurance policy can offer your comprehensive business coverage for data restoration and rectification. You might want to consider the amount of data stored digitally by your business and the consequences of data damage or data theft you could potentially face in the event of a cyber-attack.
Business loss from a data breach does not happen in isolation. Your business will incur a wide range of associated costs, including the cost of repairing your business, revenue losses caused by the business shutdown, in addition to notification costs. Not to mention the loss to business due to losing your customer base and business reputation.
Cyber-insurance coverage should be a critical aspect of your overall cyber-security strategy. Moreover, these policies should be routinely updated and adapted to keep up with the fluctuations within cyberspace and the related risks the changes present.