As cyberattacks become more sophisticated, companies are increasingly turning to cyber insurance to help mitigate the financial fallout from a breach. According to the Wall Street Journal, “the price of Cyber Insurance has soared in the past year amid a rise in ransomware hacks and other cyberattacks.”
When it comes to cyber insurance, there are a couple of key things you need to keep in mind. First, cyber insurance is designed to protect businesses from the financial losses that can result from a cyber breach or attack. This type of insurance can help cover the costs of investigation, data recovery, and legal fees. Second, cyber insurance policies can vary widely in terms of coverage. It’s important to work with an experienced broker to find a policy that meets your specific needs.
The Cost of Cyber Insurance
Cyber insurance policies typically cover costs associated with data breaches, including notification expenses, credit monitoring, and legal fees. Some policies also provide coverage for cyber extortion, cybercrime, and cyberterrorism.
A study by Fitch Ratings found “Cyber insurance has estimated annual premiums of $8 billion to $10 billion, which is projected by industry experts to reach up to $22.5 billion by 2025, as demand for coverage expands with recognition of threats.”
While cyber insurance can’t prevent a cyberattack from happening, it can help lessen the financial impact of one. For companies that are increasingly reliant on technology, cyber insurance is an essential part of risk management.
But to qualify for cyber insurance today, Marc Schein, National Co-chair of the Cyber Center of Excellence, says you need to put in place 12 security controls that address very basic cyber security. Schein say these controls are “absolutely critical for businesses that are looking to apply for insurance and or increase the current limits that they currently have. And then from a coverage standpoint, carriers are now starting to scale back coverage. The market is starting to harden and you’re starting to see prices increasing.”
Here are some do’s and dont’s when it comes to cyber insurance.
DO’s of buying Cyber Insurance
- Make sure you understand your company’s cyber risks. A cyber insurance broker can help you assess your risks and find the right policy for your needs.
- Review your policy carefully. Make sure you understand what is and isn’t covered.
- Keep up with changes in technology. As cyber threats evolve, so too must your policy.
- Review your coverage periodically. Your company’s cyber risks may change over time, so it’s important to adjust your coverage accordingly.
DON’T’s of buying Cyber Insurance
- Rely on cyber insurance as your only line of defense against cyberattacks. It should be just one part of your overall cyber security strategy.
- Wait until after a cyberattack to buy insurance. Cyber insurance is designed to help manage the fallout from an attack, not prevent one from happening in the first place.
- Buy the first policy you come across. Take the time to compare policies and find one that meets your needs and budget.
- Forget about cyber insurance once you’ve bought it. Review your coverage periodically to make sure it still meets your needs.
What Cyber Insurance doesn’t cover
Cyber insurance does not cover all risks associated with cyber security. For example, it does not cover the cost of repairing or replacing damaged or stolen equipment. It also does not cover the cost of lost or stolen data. In addition, cyber insurance does not cover the cost of legal liability arising from cyber-attacks.
Cyber insurance can be a valuable tool for managing cyber risks but is not a magic bullet, not a cure all. Rather, It’s just one part of a comprehensive cyber security strategy. Businesses should also invest in strong cyber security defenses and have a plan in place for how to respond to a breach.
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