With cyberattacks rife and rising all the time, cybersecurity is essential, but so too is cyber insurance. Although many businesses have been slow to adopt such cover, the world is beginning to wake up to the substantial benefits of cyber insurance for safeguarding an organisation. Here we look at the significant advantages it offers.
Why choose cyber insurance?
Businesses are increasingly at risk of falling foul of cyber-related incidents. Recent data shows that global cyberattacks increased by 38% in 2022, compared to 2021. And the UK saw a massive 77% rise. The fact is, cybersecurity is never 100% effective.
Should the worst happen, having cyber insurance could be the difference in ensuring your business gets up and running again quickly. Some 60% of small businesses close within six months of suffering a cyberattack. So having some sort of back-up plan is crucial.
But why do you specifically need cyber insurance, rather than just standard business insurance? Well, cyber insurance is a specialist product that protects you from cyber risks and those related to IT infrastructure. The fundamental benefit of cyber insurance is that it covers risks that aren’t generally included in standard commercial liability policies, which tend to just cover costs related to technical issues, such as corrupted hard drives and lost devices.
Managing a cyber incident, such as a data breach or ransomware attack, requires detailed technical knowledge, which specialist cyber insurance can offer. Cyber insurance policies provide you with the means to implement incident response measures, such as legal assistance, public relations support and forensic investigation.
As well as minimising any business disruption and supplying financial protection during an incident, a big benefit of cyber insurance is that it could help with any legal and regulatory actions after an incident. Although it won’t solve all your cybersecurity challenges or prevent a cyberattack from happening, cyber insurance can help your organisation get back on its feet.
Want to protect your business but unsure where to start? Check out our free guide to cyber insurance.
What could your cyber insurance cover?
As with other types of insurance, the benefits your cyber insurance includes will depend on the cover you choose. Opting for first-party cover will protect you against the direct results of a cyberattack. Alternatively, third-party cover is more comprehensive and will include the indirect consequences of a cyberattack. This provides protection for managed service providers (MSPs) that supply professional services to other companies. It’s key to covering your liability should a cyberattack on you lead to losses from a partner or customer.
Online threats are multiplying all the time, and cyber insurance will cover you for a wide variety of these risks, such as data privacy breaches, phishing attacks, distributed denial of service (DDoS) attacks, and malware, including the dreaded ransomware attack.
Depending on the exact policy you choose, it should cover:
- Loss of business income
- Legal action and fines, like GDPR charges
- Ransom costs, if your data is held hostage
- PR support to regain damaged trust
- Possible repair costs
- Data breach measures, such as investigative proceedings
Access to expert advice and support
A key benefit of cyber insurance is that it gives you access to expert advice and support. Expertise on threat management is an important part of cyber insurance, and some insurers supply businesses with threat monitoring and management services. For example, according to the UK government’s Cyber Security Breaches Survey 2022, one organisation said that their insurance enabled them to monitor the dark web and flag if any of their accounts were being sold there.
Access to expertise on breach recovery was also named in the survey as a key reason organisations take out an insurance policy. This benefit can help companies ensure business continuity after a disruptive breach. Some policies also include access to expert forensic analysis of what caused the breach. This is important to help a business rectify the problem and implement preventative measures to make sure it doesn’t happen again.
Another valuable benefit is that a cyber insurance policy can help you build a strong cybersecurity framework. Insurers will require you to have a good level of security to be eligible for a policy. They usually carry out a risk assessment as part of the underwriting process to ensure your business isn’t a high risk. This can involve just completing a straightforward questionnaire or may go as far as involving an in-depth analysis of your security. However, like other kinds of insurance, your premium will decrease if you are judged to be a lower risk.
The eligibility criteria for cyber insurance cover can act as a framework to ensure good cyber hygiene. But, a simple way to boost your level of cybersecurity is to gain Cyber Essentials certification. Some insurers will offer discounts on insurance premiums if you have this, and simply by being certified, you can reduce your cyber risk by 98.5%. Cyber Essentials is a UK government-backed scheme covering everything your business should do to protect against cyberattacks, demonstrating that you take cybersecurity seriously.
Peace of mind
A big benefit of cyber insurance, which shouldn’t be overlooked, is that it provides considerable peace of mind. You can have all the strong cybersecurity possible to protect your business. However, with the ever-evolving threat landscape, you can’t be 100% sure you won’t still suffer from a cyberattack. With cyber insurance, you have the final safety net in place to ensure that you won’t have to worry about recovery costs if the worst happens and disaster strikes.
While cyber insurance doesn’t prevent an attack, it’s designed to stop a bad situation from getting worse. So, if you’re concerned about a cyberattack destroying your business, cyber insurance gives you complete peace of mind. You will have an extra layer of protection in addition to your cybersecurity, to cushion the blow.