Cyber Insurance: Are you covered?
A study by Verizon in 2019 indicated that 43% of all successful breaches of information networks directly targeted small businesses. The devastating effects these attacks have on businesses made cyber insurance a vital response for companies. It’s important to note that even if you have adequate cybersecurity systems in place, an attack may still succeed.
Cyberattacks have developed into one of the primary existential threats facing small and medium-sized businesses. Hackers and bad actors now actively target these types of organizations instead of larger enterprises with advanced IT security systems. The refocus onto smaller businesses happened relatively quickly. As more attacks succeeded, criminals learned that it’s better to go after the lowest hanging fruit instead of executing a persistent attack on a large, multinational organization.
The Rise of the Cyber Insurance Industry
While network and security professionals struggle to stay ahead of cybercriminals, the cyber insurance industry is now an essential part of any business’s disaster recovery planning. A single successful attack costs a business $200,000 on average, according to an NBC report. For small businesses, recovering from such a loss may not be possible.
With cyber insurance, the business remains fiscally insulated from a successful attack. More insurers now package technology policies with a cybersecurity component included. Cyber incidents have become the second biggest risk to global businesses. For this reason, the industry is growing, and more than 520 insurance companies reported underwriting cyber-related policies in 2018. Forecasts suggest that by 2025, cyber premiums will total $20 billion per year.
Different Types of Cyber Insurance Policies
Different vendors provide you with different types of cover. However, two distinct policies dominate the industry today. Your company will need to determine what your exact risk exposure is before deciding on which policy will work for your organization.
Third-Party Policies
As new legislation makes your company liable for any breach of personal information, a third-party policy covers you from civil actions. You can also include this kind of insurance in a tech professional’s errors and omissions policy. If a breach succeeds and your company is subject to litigation, a third-party cyber insurance policy will cover your liabilities.
First-Party Policies
The rising popularity of ransomware and other extortion techniques led to companies requiring additional protection. A successful ransomware attack can cripple your business. The attack uses either encryption or root access rights to lock you out of your IT system. Only after you pay a ransom to the hacker will you regain access to your information and networks. A first-party cyber insurance policy will cover the amount the hackers requested, ensuring your business can recover from the breach.
Ensure Your Business Sustainability with Technical Framework
Technical Framework can assist you in reviewing your cyber insurance policy every year. Keeping your business safe in this environment of increased risk requires a holistic effort. You’ll need a multilayered approach to both network security, backup and recovery planning, disaster management, as well as keeping your employees aware of the latest risks. Our team of network security experts will work with you to find the most secure systems and tools to protect your data.
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