Cybersecurity Insurance protects businesses against unanticipated cyber-related problems. Learn how Isecurdata can help your business to implement a holistic cybersecurity insurance policy.
Cyberattack is on the rise with small and medium businesses being the major target. Cybersecurity Ventures projected that by the end of the year 2021, $6 trillion will be lost to cybercrime, thus, the need for cybersecurity insurance.
NIST reported that many cybercriminals view small and medium businesses as soft targets because they seem not to have a well-implemented security program protecting their businesses from risk and cyber-attacks.
Insurance generally enables businesses to protect their asset against unsolicited events. Likewise, cybersecurity insurance offers protection against unanticipated cyber-related problems. With cybersecurity insurance, businesses will not be left to singlehandedly bear the consequences of security incidents and attacks.
These consequences could be financial, reputational, or litigation which could drastically affect business operations or even lead to total business closure. Many businesses have sustained this experience in the past, one of which is the 2011 PlayStation hack where the cyberattack exposed millions of PlayStation users’ Personal Identifiable Information (PII) and the company bears the cost incurred because they didn’t have cybersecurity insurance.
Cybersecurity insurance is a must-have insurance policy for every business, especially small and medium businesses.
What Does Cybersecurity Insurance Cover?
The same way people insure almost everything, ranging from health to assets to lives and pets. In the same manner, cyber insurance covers digital data in cyberspace. Most cyber insurance policies cover first-party and third-party-related damages.
First-party is designed to offset the financial penalties of cyber attacks that affect businesses such as the following:
- The cost of investigating a cybercrime
- The cost of recovering data lost in a security breach
- The cost of restoring the computer systems
- The loss of income incurred by a business downtime
- Extortion payments demanded by hackers or cybercriminals
- Cost of notifying customers affected
However, coverages provided by third-party include damages and settlements, and the cost incurred by legally defending your business against claims of a data breach.
Why Your Business Needs Cybersecurity Insurance?
Cybersecurity insurance cannot take the place of your information security infrastructure, nor can it be substituted for a backup plan. However, it can provide another layer of protection when your business experiences a security breach.
It is essential protection to ensure that your business continues to thrive with minor impacts after a security incident. Below are 4 reasons your business needs cybersecurity insurance.
- Safeguards Your Business: Cybersecurity insurance safeguards your business against litigation and financial consequences that may be incurred because of data breaches or cyber-attacks. For instance, your business will be reimbursed for the money spent on data lost in a data breach which is part of the first-party coverages.
- Data Loss: When data is lost during a security breach, it affects the reputation of the business involved and usually huge legal and financial consequences are sustained, hence the need for cybersecurity policy to ensure speedy data recovery.
- Cyberspace is an Exception: When it comes to traditional insurance, cyberspace is not covered, that is, standard business and property insurance excludes data protection of digital data and PIIs such as banking card numbers, bank verification numbers, national identity numbers, etc. The more reason your business needs cybersecurity insurance – in the event of any security breach, system error, or network anomaly, it ensures that your business is legally and financially covered and ensures your business sustains the continuous operation.
Isecurdata is specialised in IT managed services and optimal cybersecurity solutions. With over thirty years of IT Security experience, we can help your business with a holistic cybersecurity insurance policy and help you with managed IT services.