Cyber insurance. It’s not just another business expense to add to your never-ending checklist. In reality, it’s an important type of coverage for damage or loss of information from IT systems, networks, and data.
Think about it – you wouldn’t drive a car without insurance. So why let your important IT systems and data, which underpin all of your essential business processes, go uncovered?
Cyber insurance makes sure that you’re protected in case anything impacts your IT.
Why do you need cyber insurance?
Every business is responsible for its cybersecurity. If something malicious or unfortunate happens to your IT systems, for example, a data breach or cyberattack, you want to make sure you’re protected.
In 2022 alone, 39% of businesses identified a cyberattack in their organisation. And these threats could have serious financial and reputational repercussions. But sometimes they’re unavoidable, and cyber insurance provides crucial support exactly when you need it.
What does cyber insurance cover?
Cyber risks fall into two categories. First-party and third-party risks. Your chosen cyber insurance will need to cover what’s relevant to you.
First-party insurance covers your own assets. This includes:
- Loss and damage to data or software programmes
- Network downtime that causes interruption to your business
- Cyber extortion – third parties asking for money at the expense of your data
- The cost of sending customer notifications, which is a legal requirement in response to a cyber attack
- Theft of digital assets, equipment, money, or electronic theft
Third-party insurance covers the assets of others, like your customers. This includes:
- Security and privacy breaches
- Defence costs and the civil damages associated with them
- Loss of third-party data – compensation payments for your customers
- Investigation costs
- Costs associated with liability, breach of privacy, and negligence
Don’t rely on cyber insurance alone to protect your business
Cyber insurance is a great way to stay covered in case an incident occurs in your organisation. But you shouldn’t rely on it alone to protect your business.
There are a few simple steps you can take to reduce the chances of an incident happening in the first place. Ultimately, you need the correct cybersecurity credentials across all the main aspects of your business to remain protected.
Ask yourself these questions:
- What cybersecurity accreditations have we implemented across our people, technology, and operational processes?
- Are our accreditations up to scratch with industry standards, or backed by the government?
- Are the correct measures in place to prevent an incident from occurring?
If your answer no to any of these questions, it could be beneficial to look into a Cyber Essentials security accreditation to keep your business safe.
It’s an easy, fast method of making sure you’re following the correct measures in your business, so an incident is significantly less likely to happen. Simply being certified can reduce your cyber risk by up to 98.5%.
Think about it. Relying on insurance, before managing your risk, is fundamentally flawed. Ensuring you’ve implemented both measures – a certification and insurance – is the ultimate safeguard for your business.
If you’re considering cyber insurance or just curious as to what it’s all about, check out our guide, Cyber Insurance Trends 2023. It’s a great introduction to the industry and you can download it, for free, here.