Different kinds of cyber-attacks are becoming a highly dreaded threat for all types of organizations. The result is that cyber insurance has today become one of the most necessary protections any business will need to invest in. Before thinking of a cyber-insurance policy, you must know what cyber insurance is and how it works.
About cyber insurance
Among the plethora of insurance schemes in front of you, cyber insurance is relatively a newer concept. Also known by the name cyber liability insurance, cyber insurance is a policy that helps protect your organization from the risks posed by cyber-attacks and the threats related to hacking. Having purchased a suitable and adequate cyber insurance cover can come to your advantage as it can minimize the instances of business disruption in the event of a cyber-incident and during its aftermath. A cyber insurance policy will cover the cost of some aspects of dealing with a cyber-attack and also those related to recovering from such an event.
Definition and scope
Juergen Weiss, the head of global financial services research and advisory at Gartner says, “The formal definition of cyber insurance is essentially a contract between an insurer and a company to protect against losses that are related to computer- or network-based incidents.”
There are elements that a cyber-insurance policy cannot cover and hence an organization investing in a cyber-insurance policy must understand what is covered and what is not while signing up to buy a coverage plan. A suitable cyber insurance plan can help a business if it has to face any cyber-attack. However, the fact remains that every business must own its own responsibility to protect itself from any kind of cyber-attack in a proactive manner. The responsibility can’t be entirely shifted on to the insurer.
In the list of guidelines published on its site, National Cyber Security Centre says, “Cyber insurance will not instantly solve all of your cyber-security issues, and it will not prevent a cyber-breach/attack.”
Who will need to buy a cyber insurance policy?
All businesses that have an online component to their operations and functions and those that store electronic data will find a cyber-insurance policy beneficial. Today, internet and technology are the core of all kinds of business transactions and processes and hence almost any business that depends on technology to power its operations can benefit from cyber insurance.
Cyber criminals usually target the items like the private personal details of the staff and customers of an organization, intellectual property, highly sensitive financial data and others that will prove lucrative for them. For the purpose of stealing such information, the cyber criminals can try to break into a network.
Hackers can cripple a network through ransomware. A cyber insurance policy that provides coverage for ransomware attack can be a lifesaver in helping the organization to gain back its stability if it has to fall victim to such attacks.
About cyber insurance claims
A number of incidents can be eligible for cyber insurance claims. However, the most common one today include business email compromise scams, fraud attacks involving fund transfer and ransomware. Since cyber insurance is a highly tricky topic to understand, choosing the right coverage for you can be a challenge unless you work with an accomplished cyber insurance broker who is knowledgeable in this field and can suggest you the best options after studying your situation.