The world of today is heavily dependent on online services which come along with a great risk for the protection of sensitive data shared online. Cyber insurance is exactly what businesses use to hedge the risk of cybercrimes or any theft of stolen sensitive data. Cyber risk insurance or cybersecurity insurance provides businesses with protection against harm that is caused by electronic threats to business computer systems or data. Sensitive data can include Social Security number, credit card number, banking details, or any personal data that could be miss-used and cause harm.
What does cyber insurance cover generally?
The cyber insurance market has evolved throughout the years resulting in providing protection in various areas of a business. Following are the different type of coverages provided by insurance companies that provide cyber insurance:
- Coverage for network security which includes cyber and hacking attacks.
- Coverage for lost/stolen electronic data due to cyber crime activities including transfer of funds.
- Coverage for business interruption due to cyber crime or loss of sensitive data.
- Coverage for physical damage of computer hardware, software, obtaining or restoring lost data as a result of cyber attack.
- Coverage for forensic investigation needed after a cyber attack or to stop an attack.
- Coverage for extortion costs when business is threatened to disclose confidential data.
- Coverage for managing damage to business reputation and defamation due to cyber crimes.
- Coverage for legal defense and damages related to privacy of information breach.
What is NOT covered by cyber insurance?
Insurance policy differs depending on your requirements and the insurance provider. However, cyber insurance policies usually do not provide for the following:
- Future loss of profit after a cyber attack.
- Cost for maintaining computer systems including security or software upgrades after a cyber attack.
- Third-party mistakes.
- Loss caused by theft of intangible properties
What is a cyber claim?
If a business owner has cyber liability insurance and is a victim of a cyber attack or a hacking attack, then the business owner can rightfully file for a cyber claim. Depending on what your insurance policy provides coverage for, you can file for a claim to mitigate the loss of a cyber attack. Therefore, it is very important for business owners to be aware of what your insurance policy provides coverage for.
Why do companies need cyber insurance?
According to recent statistics, there will be a $4 trillion rise in damages caused by cybercrimes as compared to 2015 which is a total of $6 trillion by 2021. A small business may think that they would not need cyber insurance, however, small businesses have been the biggest victims of cybercrimes. Therefore, all businesses that trade using an email, web-based apps, online mediums, or transmit financial or banking details are required to have cyber insurance.
If you store any information regarding your employees, suppliers, clients, or other personal information on any system, you are at the risk of a cyber attack. Cyber insurance is the most common method businesses use to mitigate loss in cases of an attack.