As the world becomes increasingly interconnected and reliant on technology, the threat of cyber attacks is becoming more and more prevalent across all industries. From small businesses to large corporations, no one is immune to the potential financial and reputational damage that a cyber attack can cause.
One of the most common forms of cybercrime is data breaches, which can occur alongside other felonies like phishing, hacking, viruses, and worms, as well as various types of fraud, identity theft, data exposure, and ransom. In addition, cyber attackers can also focus on committing online intellectual property infringements or executing distributed denial of service attacks. As you can see, it’s clear that attackers have no shortage of malicious intent or criminal creativity.
According to a Center for Strategic and International Studies report, in 2014 the global economy incurred an estimated $445 billion in damages and loss of funds due to cybercrime. Initially, cyberattacks were mainly targeted toward government agencies, infrastructure, public companies, and facilities. However, over the past few years, there’s been a significant increase in cybercrime against the private sector, with more than 50% of small businesses experiencing some form of cyber attack in 2021.
So let’s dive into the solution, what is cyber insurance?
As cyberattacks become an increasing concern for businesses of all types and sizes, traditional insurance policies do not offer coverage for the financial losses that can result from cyberattacks.
This is where cyber insurance comes in, offering a specialized risk management program that assigns a business’s internet risks to an insurance provider in exchange for a fee. This means that if a detrimental cyber attack occurs, the insurance provider assumes the financial responsibility of compensating the business for any resulting damages and losses, including third-party liability. Of course, prevention is always the best defense, so businesses must take necessary technological precautions and measures to reduce their network activity risks and protect themselves against malicious cyber attacks before seeking out cyber insurance.
What is cyber insurance coverage?
So, what exactly does cyber insurance cover? The answer is: it totally depends on the policy. Different cyber insurance providers offer a wide range of coverage options, so it is essential to carefully consider what you need before choosing a policy. Also, be sure to look out for distinct, clear-cut wording that includes some or all of the following elements:
- Network Security – This coverage provides financial protection for businesses that have suffered losses due to cyberattacks or hacking events.
- Theft and fraud – This coverage provides financial protection for businesses that have suffered a loss of monetary assets due to the malicious actions of cyber criminals.
- Forensic investigation – This coverage provides financial protection for businesses that require legal, technical, or forensic services to assess the impact of a cyber attack and prevent future incidents.
- Business interruption – Cyber insurance can also cover lost income and associated costs resulting from a cyberattack or data breach that causes businesses to halt due to a cyber event or data infringement.
- Extortion – This coverage provides financial protection for businesses that extortionists threaten. It covers the costs involved in investigating these threats and payments made to extortionists threatening to prevent further attacks.
- Reputation Insurance– This coverage provides financial protection for businesses that suffer damages to their reputation or losses due to cyber defamation.
- Computer data loss and restoration – This insurance covers the physical damage or loss of use of computer systems, including the costs of retrieving and restoring data, hardware, software, or other information destroyed or damaged in a cyberattack.
- Data Restoration – This coverage provides financial protection for businesses that need to restore or recreate data lost due to security or system failure.
How much does cyber insurance cost?
If you are looking for $1 million in liability coverage, the standard price for cyber liability insurance in the US ranges from $1,500-$1700 per year. This policy typically comes with a $10,000 deductible.
For a cyber security limit of $500,000 with a $5,000 deductible, the average annual premium is estimated to be between $1,000 and $1,200.
Finally, if you are looking for a cyber limit of $250 000 with a $2,500 deductible, the expected annual premium is estimated to be between $650 and $800.
It is important to note that several factors affect the cost of cyber liability insurance, such as the type and size of your business, the level of coverage you need, and the insurance provider you choose to work with. The policy underwriters also take into account the amount of credit and debit card transactions that take place every month in the business, as well as the different technologies that are used to store and protect sensitive personal information such as date of birth, social security numbers, financial data and so on.
As you assess the potential benefits of implementing cyber insurance coverage for your business, keep in mind that the cost of premiums seems more than reasonable compared to the devastating financial losses that a cyberattack could cause.
Cyberattack prevention – How to reduce the risk for your business?
Although having the safety net of cyber insurance, as we have said before, prevention is always the best defense, and protecting your business from cyberattacks should be a top priority.
When it comes to reducing the risk of cyberattacks Installing an antivirus or fortifying the firewall just won’t cut it. Instead, you should look for a platform that offers comprehensive security features and services like Guardz. With sufficient tools, you can rest easy knowing that your business is protected from cyber risks.
To mitigate the cyberattack risks for your business, seek for cyber security platforms that include:
- Email Protection – Scans every email for phishing or malicious activity and blocks threats in real time.
- Safe Browsing – Constantly protects your web browsing and prohibits you from entering malicious adware and phishing sites that might steal your data.
- Cloud Apps Security – Defends your sensitive business data in the Cloud. Manages authorizations and enforces multiple security procedures.
- Device Monitoring – Keeps your devices safe from malware, spyware, ransomware, and more. It is automatically detected and isolates malicious activity. Screens the dark web and protects from fraud activities, account hacking, insider threats, and data breaches.
- Improved Awareness – Proactively equip your staff with the knowledge needed to protect your business and mitigate cyber risks.
Combining cyber risk insurance with proactive cyber security measures can provide your business with the highest level of protection. By thinking ahead and taking action preemptively, you can minimize the risks of a cyber attack and ensure the highest level of satisfaction for your business. So don’t wait until it’s too late – start exploring your options for cyber security and insurance.