What is Cyber Insurance?
With the advancement in technology, businesses across the world have opted for digitalisation to bring out the full potential of their business. From e-commerce brands to online payments, businesses are conducting all their operations through digital platforms. However, the great power of digitalisation also comes with the risk of cyberattacks.
Cyber attacks refer to various cybercrimes, such as breaching a company’s confidential data and information, etc, that can put them at huge risk of downfall.
Cyber insurance is among the different types of insurance that your small business needs to recover from the financial setback caused by a cyber attack. The insurance company takes responsibility for covering legal costs, data recovery expenses, and the cost of communicating with customers.
How does Cyber Insurance Work?
Cyber insurance prepares for unexpected risks in your business that are associated with cybercrime. Cyber crimes pose a risk to all types and sizes of businesses that are operating through digital means.
Cyber insurance ensures that you are covered financially for all the loss and damage you may experience due to cybercrime. It goes beyond covering the expense of data recovery. Any legal costs or any other expenses that result from cybercrime will fall under your cyber insurance, protecting you from a major financial setback.
Types of Cyber Insurance
Cyber Liability Insurance
Cyber liability insurance safeguards the business from the financial setbacks caused by data breaches or cyber-attacks. This type of cyber insurance covers the business for any legal costs, settlements and regulatory fees they may need to pay to solve the issue of cybercrime, allowing your business to not worry about any crippling costs.
Network Security Insurance
This type of insurance covers you for the loss and damage experienced due to network security failures. The incidents covered under the network security insurance include hacking, malware infections and ransomware attacks. The insurance assures you that the financial loss of your business caused by cyber threats will be covered by the costs of investigation, remediation, and communication with affected associates.
Data Breach Insurance
Data breach insurance supports the business during and after the data breach phase. This covers the costs of communicating with customers under the influence, providing credit monitoring services and managing public relations efforts. Data breach insurance allows the business to maintain customer trust and reduce the risk of damage to the reputation of the business.
Business Interruption Insurance
The impact of cyber attacks can cause interruptions in various business operations, resulting in loss of income. Business interruption insurance supports the business by covering them for the lost income and extra expenses incurred during the recovery period.
Finding the right type of insurance is where the role of insurance brokers in disaster recovery comes into play.
Key Benefits of Cyber Insurance
The key benefits of cyber insurance include:
- Tailored coverage
- Comprehensive protection
- Financial safeguard
- IT consultant services
The right approach to choosing your insurance can procure various benefits, giving you insights on how to lower your insurance premiums.
What is Covered in Cyber Insurance Policy?
- Cost of legal representation
- Malware attack
- Identity theft
- Cyber intrusion losses
- Phishing
- Cyberstalking
- Cyber extortion
- Data breach or privacy
- Computer forensics
- Reputational damage
- Fines and penalties
- Extending reporting period
What Does Cyber Insurance Not Cover?
- Physical injuries, disability, disease, sickness or death
- \incidents/litigation prior to policy commencement
- Losses or damage caused by war or government actions
- Dishonest or improper conduct
- Contractual liability
Before you opt for any type of insurance for the protection of your business, it is essential to be sure that the insurance policies fit well with your requirements and comprehensively cover you against any financial setback.
