Rest a Little Better With Business Cyber Insurance

The whole of the cyber world was left stunned when some big companies experienced major data breaches in 2021. In 2022, the average cost of a data breach globally hit $4.35 million and it is only expected to grow at the rate of 23% annually by 2027.

The question is, are you prepared?

As advocates of modern security practices, it’s hard not to touch on a matter of great importance in recent times - Cyber Insurance. Well, what is it? How is it different from Cyber Security, and what types of businesses need it? We’ll share it all in the best possible manner here. 

Cyber Insurance VS Cyber Security

Think of a car breaking down. It can be due to an accident, a sudden hailstorm, or other out-of-the-blue reasons. You can always keep a check on your car’s regular wear and tear by taking it to service stations or a mechanic every now and then, but an out-of-the-ordinary situation like this would require an out-of-the-ordinary solution. In this case, it would be car insurance.

Similarly, if your business has cybersecurity practices in order, it would prevent certain malware and phishing attacks on your employees’ and clients’ data. But, in case a phishing attack is able to successfully breach your company’s cybersecurity net (and the chances are very high), that’s when cyber insurance comes into play. 

Cyber Insurance - Explained!

Cyber liability insurance, or cyber insurance, is an efficient response system to an incident of data compromise. It cannot reduce the damage, but it can cover the costs of damage incurred by the breach.

For example, if a company falls prey to a data breach, cyber insurance can alleviate the risk and range of damages and help safeguard your company better against future attacks.

However, there are different plans offered by different insurance companies and this is where you must spend some time choosing the best one for your organization’s security needs.

Small Businesses, Large Businesses - Who Needs It?

The loss in revenue is a different thing altogether. But, reputational damage, that hurts different.

For large companies, the breach is more than enough to learn their lesson. And unfortunately, we don’t have any good news for small businesses either. 

You are over thrice neck-deep into danger! The main reasons for small businesses increasingly becoming soft targets for cybercrime are usually lenient cyber investment attitudes and fewer monitoring resources.

However, it should be kept in mind that small businesses may not require everything offered in a cyber insurance cover. You can considerably bring down your premium costs by striking off the add-ons that seem unnecessary but only with a cyber expert’s advice.

What All’s Covered & Uncovered?

Traditional insurance plans do not include cyber risks. Hence, it’s important to identify your needs and know what’s included/excluded in a cyber insurance policy before investing in one.

Apart from these inclusions, some insurers are beginning to cover third-party liability losses as well.

The Double Effect

Cyber Insurance is definitely not a substitute for cyber security. And, vice versa. 

But the effect these two together have could make companies bulletproof against future cyber attacks. Knowing they are covered should anything happen, companies can shift their focus on improving their core operations, and rest better.