Cyber insurance is a new industry, and you’d be surprised at how many businesses don’t have it. If you’re running a business online, you’re vulnerable to internet fraud, and it’s essential to make sure that you protect yourself against such things.
Cyber attacks and frauds are rapidly increasing, and they are becoming more and more sophisticated every year. A recent report stated that In 2020, the FBI collected data for 791,790 suspected Internet crimes, an increase of more than 300,000 compared to 2019, according to a report released in March. There has been a significant increase in the number of attacks on internet-based businesses and the personal data of ordinary people.
This blog will look at why you need internet insurance and make sure that you get it.
- What is cyber insurance?
- Who needs cyber insurance?
- How Does Cyber Insurance Work?
- Types of cyber insurance
- How to get cyber insurance?
- How to choose the right policy for your business?
What is cyber insurance?
Cyber insurance is a type of insurance that protects the insured party against financial losses due to cyber-attacks. A cyber attack can be in the form of a hacker breaching web security, a ransomware attack where the affected person’s access to their files are blocked until a ransom is paid, cyber-extortion, or other similar attacks.
The cost of cyber insurance can be high, but it is not always necessary for small businesses or individuals. There are ways to protect yourself against these attacks, but it is never wrong to get cyber insurance.
The cost of cyber insurance will vary depending on the type of business, the amount of cyber attacks that the company has faced in the past, and how much money is at stake. For instance, a restaurant that has not suffered any cyber attacks will pay less than a restaurant with frequent cyber attacks.
Cyber insurance is an umbrella term for two things;
A) cyber risk insurance
Cyber risk insurance covers your business against the risks of data loss and computer viruses.
Cyber insurance is also referred to as ‘Computer Related Crime Insurance’.
Some examples of cyber risks include:
- Stolen data.
- Malicious software.
- Theft of computer components or parts.
B) cyber liability insurance.
Cyber liability insurance covers your business in the event of a cyber incident.
Cyber risk insurance is often much cheaper than cyber liability insurance because you are not covered in the event of an accident or data loss.
Who needs cyber insurance?
A very valid one nonetheless. First, I want to clarify that it is not whether you need cyber insurance or not, but what kind of cyber insurance would best suit your company’s needs.
The fact that you might be a victim of cyber fraud or that your business could lose a lot of money due to a cyber intrusion doesn’t necessarily mean that you should have cyber insurance. It means you should have cyber insurance, period. But this is not a simple task.
There are many different cyber insurance products available online, and there are a lot of other cyber insurance companies, too. So how do you decide which cyber insurance product is right for you?
First, it’s essential to understand the difference between cyber insurance, general business insurance and cyber liability insurance. And then, you should carefully consider which risks your company faces and how much you need to be protected from those risks.
How Does Cyber Insurance Work?
Cyber insurers offer two main types of coverage:
The first type is called “comprehensive,” which protects against a wide range of losses related to your computer hardware, software, and data centres.
The second type is called “conventional,” which protects you against specific losses due to computer use or other activities.
Both types are divided into “coverage limits.” These are amounts of money that the insurance company agrees to pay should an insured loss occur.
For example, you might have $5 million of conventional coverage for your data centre and an additional $1 million comprehensive coverage. That totals $6 million.
Now, let’s say that your data centre catches fire and burns to the ground.
If your insurer pays out $5 million to your data centre owners, the additional $1 million of comprehensive coverage would be used to pay any remaining losses.
Now let’s say that, as a result of your loss, you need to relocate.
If you have $5 million of conventional coverage, most of those losses would be covered by the insurer.
Types of cyber insurance
There is a range of different types of cyber insurance.
- cyber coverage
- cyber liability insurance
- cyber extortion insurance
Cyber coverage ensures against the theft of data through hacking and acts of fraud and deception.
Cyber liability insurance covers losses that occur as a result of cyber fraud or deception, as well as data breaches.
Cyber extortion insurance ensures against losses as a result of extortion as it pertains to the cyber world.
If you want more information about the types of cyber insurance, then go to cyberinsuranceone.
How to get cyber insurance?
Many small businesses may only need data breach insurance
coverage against accidental disclosure or misuse of personal information and other related consequences because their losses typically occur under $250,000. Some small businesses may only need to take out a policy covering their data and online identity theft.
An ideal policy would offer coverage that protects them against accidental disclosure or misuse of their personal information, liability for all third-party actions that are unintentional, up to an additional $250,000 for identity theft, and up to $1 million for other accidental breaches.
If their property or assets are stolen, they can get cash outlay coverage, reimbursing them for lost tangible property.
In some cases, they may need to take out a business auto insurance policy as well as a liability coverage policy.
Umbrella policies offer a variety of coverages and levels of deductibles.
How to choose the right policy for your business?
Cyber attacks are on the rise, and businesses of all sizes, across all industries, are affected. As a result, one of the most important things to do is to have an in-depth understanding of your security posture and what you need to do to defend against hackers.
Once you have the information you need, you can begin to build a proactive and comprehensive cyber security program that will protect your most important assets and minimize the effects of a security breach.
1. Assess Your Cyber Security Strategy
The first step is to analyze your current cyber security approach. This should include reviewing your past experiences, assessing your existing technology and processes, and evaluating your staff’s training and knowledge.
The analysis should also include an assessment of your existing security policies, procedures, and training programs. This will provide you with valuable information on what you have done well or have failed to do, where you have opportunities for improvement, and what you need to do to bolster your cyber security program.
2. Identify Your Cyber Security Risks
To identify your existing cyber security risks, you will need to conduct a risk assessment of your current environment. A risk assessment involves:
- Identifying your business’s assets.
- Prioritizing them based on their value to the company.
- Assessing the likelihood that they could be compromised.
It is recommended that you consider the following factors when conducting a risk assessment: Location of Your Assets – Assets are usually located in different physical locations.
Therefore, the cyber risk assessment should evaluate the potential impact of cyber threats if they affect your assets in different locations.
3. Assessment of Your Organization’s Weaknesses and Vulnerabilities
Once you have completed your risk assessment, you will need to identify and prioritize your organization’s weaknesses and vulnerabilities.
Weaknesses are the elements of your cyber security strategy that are underdeveloped or ineffective. For example, suppose you do not have any cyber defence policies to protect your organization’s people, processes, and information technology (IT) systems. In that case, you may classify that as a weakness.
Cyber insurance is increasingly being used for businesses of all sizes to protect against the seemingly never-ending series of security breaches on the web. We hope the above information has been helpful to you! If you have any questions, please comment below anytime.