The COVID-19 pandemic has impacted everyone in one way or another. If there is one category that most benefited from the pandemic, it’s cybercriminals. Cybercrime has shot up by almost 300% since the start of the pandemic. That’s why you must take necessary measures to protect your business. One of these measures is to have Cyber Insurance. This might also be called Cyber Liability Insurance or Cyber Risk Insurance.
Cyber Insurance covers the financial loss that results from cyber events such as data breaches. However, cyber liability is not typically included within general liability insurance and must be purchased separately. Also, each company offering a policy has different coverage options available and exclusions included.
Our Beginner’s Guide to Cyber Insurance for Business is not meant to be a comprehensive buyers guide. But it will give you an over view of why you should consider cyber insurance and what it could cover.
Why Invest in Cyber Liability Insurance?
Experts estimate that the damage inflicted by cybercrimes will add up to about $6 trillion globally in 2021. That’s higher than the GDP of the world’s third-largest economy, Japan!
These statistics show why SMBs in particular should have cyber liability insurance:
- Over 40% of cyberattacks target small businesses.
- More than 60% of SMBs have experienced a cyberattack in the past 12 months.
- Over 45% of SMBs say that their processes are ineffective at mitigating attacks.
Having cyber insurance could be the difference between your business sinking or staying afloat after a security incident. Without cyber insurance, the various expenses you might have to bear after an incident could financially harm your business in the short term. In the worst case, it could result in permanent closure.
Here are a few expenses that a business would have to manage following a severe data breach incident:
- Downtime
- Investigation
- Data Recovery
- Legal Proceedings
- Cost of notifying stakeholders about the incident
- Cost of restoring the personal identities of those affected
Good cyber insurance would usually cover these expenses. But always remember that before you commit to a policy, you must get clarity from your insurer about what they do and do not cover.
Does your business need it?
Every business should consider having cyber liability insurance. However, if your business handles or stores sensitive information online, such as electronic protected health information (ePHI) or personally identifiable information (PII), cyber liability insurance should be a priority.
Make sure your cyber liability insurance has the following essential coverages:
First-party coverage:
- Network security and privacy liability
Covers breach response costs like forensic investigations, public relations, credit monitoring, legal fees and fines/penalties
- Business interruption losses and extra expenses
Covers lost revenue and added costs to continue business
- Digital data recovery and cyber extortion expenses
Covers losses such as ransom paid due to ransomware
Third-party coverage:
- Cyber liability
Covers claims of lawsuit expenses resulting from breaches in client systems or networks
- Media liability
Covers claims of libel, copyright/trademark infringement, etc., resulting from media use
Cybercrime coverage:
- Covers losses from digital theft of money or securities and social engineering fraud
Who Are the Top Cyber Liability Insurance Carriers?
Finding the right cyber insurance provider is not easy. While most general insurance providers offer general liability coverage, they don’t always offer comprehensive cyber coverage.
You can visit the Association of British Insurers for independent advice on Cyber Insurance and The National Cyber Security Centre (NCSC) also provide their own Cyber Insurance Guidance
The following insurance companies are some of the leading cyber insurance providers in the UK:
But remember, just committing to a policy is not enough. You will also have to track/measure compliance with the agreement to make sure your contract is always valid, and will therefore, pay out in the event of an issue.
One of the best ways to do this is through Cyber Essentials or Cyber Essentials Plus certification. Indeed you can apply for free cyber insurance upon completion of the Cyber Essentials certification which may be sufficient for your businesses needs.
How We Can Help
Hopefully our Beginner’s Guide to Cyber Insurance for Business has been useful.
Whether you are looking to find a cyber insurance policy that is right for your business or trying to find and measure your policy’s compliance with cyber insurance contracts, we are here to help.
If you’d like to find out more it couldn’t be easier. You can book a 15-minute call in our calendar, or complete a contact form, email us on info@your-itdepartment.co.uk or call us 0115 8220200.
Article curated and used by permission.