Cyberattacks are not a new phenomenon. They have become an increasingly large problem for all organizations, and now, businesses are turning to cyber insurance as a means of protection against the aftermath of a cyberattack.
What is cyber insurance?
Cyber insurance is an insurance policy that helps protect businesses from the consequences of cyberattacks and threats. Having a cyber insurance policy can help reduce business disruptions during a cyber incident, as well as cover some of the financial costs caused by the attacks.
What does cyber insurance cover?
Knowing what cyber insurance covers varies depending on the different policies and providers. It is important for businesses to make sure they know exactly what types of policies and plans are offered to help cover the potential damage of cyberattacks, such as ransomware or phishing attacks.
In general, here are a few distinct cyber insurance coverage:
- Data loss, recovery, and recreation
- Loss of transferred funds
- Business interruption and loss of revenue
- Cyber extortion
- Privacy liability
- Computer fraud
What is not covered by cyber insurance?
In many policies, there are likely gaps around specific damages that are not covered, including:
- Loss of value due to theft of your intellectual property
- Future profits lost due to a cyberattack or breach
- The cost to improve internal technology systems, such as software or security upgrades
Are there any deductibles?
Like most insurance coverages, cyber insurance does have a deductible. Your business can select the amount of your deductible and it is a fixed amount your business will pay before your coverage kicks in and is applied each time your cyber insurance policy covers a loss.
What can you do to stay ahead of the game and before selecting a provider?
While having some form of cyber insurance in place can be helpful, it is no substitute for having proper security policies and training in place at your firm.
When it comes to selecting a provider, businesses must keep in mind that insurance providers need to know that a company has proper and adequate steps in place to help protect their own data networks against cybersecurity threats. There needs to be a distinction between what is preventable and what is beyond the control of the business.
It is important to take proactive measures to ensure proper security policies are already in place and managed at your firm. In the event a cyberattack occurs and you need to file a cyber insurance claim, your firm will need to prove and provide information that your company did everything possible to prevent the attack.
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