Understanding Cyber Insurance: Coverage and Importance
Cyber insurance, also called cyber liability insurance, helps organisations reduce the risk of cyber incidents by covering the costs. These incidents can include data breaches, hacking, ransomware attacks, and other cybercrimes. As cyber threats get more advanced, cyber insurance is now crucial for businesses to manage risk effectively.
What Does Cyber Insurance Cover?
Cyber insurance policies typically include first-party coverage of losses resulting from data destruction, hacking, data extortion, and theft. You may also cover legal fees and other charges. While plans and providers may differ, the following are the main areas that cyber insurance covers:
Data Breach Response Costs:
- Notification Costs: Expenses for notifying affected individuals and regulatory bodies.
- Credit Monitoring: Costs for providing credit monitoring services to victims.
- Public Relations: Fees for managing the company’s reputation after a breach.
- Legal Fees: Legal costs associated with defending against lawsuits and regulatory fines.
Business Interruption:
- Loss of Income: Compensation for lost income because of business interruption caused by a cyber incident.
- Extra Expenses: Costs incurred to minimise the business interruption and maintain operations.
Cyber extortion and Ransomware:
- Ransom Payments: Coverage for ransom payments made to cyber-criminals.
- Negotiation Fees: Costs for professional negotiators to handle the ransom demands.
Network Security and Privacy Liability:
- Third-Party Liability: Claims against the company for failing to protect sensitive data of clients or customers.
- Regulatory Defence: Coverage for legal defence and fines from regulatory bodies because of non-compliance with data protection laws.
Technology Errors and Omissions:
- Professional Services: Claims arising from errors or omissions in the professional services provided by the company.
- Contractual Liability: Liability assumed under contracts for failing to prevent a data breach or cyber incident.
Crisis Management and Investigation:
- Forensic Investigation: Costs for investigating the cause and extent of the cyber-attack.
- Crisis Management: Expenses for managing the crisis and coordinating the response efforts.
Harm to reputation:
- Brand Rehabilitation: Costs associated with restoring the company's brand and public image after a cyber incident.
Choosing the right cyber insurance policy for you:
To pick the best cyber insurance, start by evaluating your business' cyber risks and impacts. Then, learn about first-party and third-party coverages.
We recommend talking to our insurance brokers who can customise a policy to fit your specific needs.
Phishing for funds: CFC’s Cyber Insurance Case Study:
A business email compromise scam tricks a law firm into transferring money to fraudsters. To download and read the full case study, click here.
Make sure you are covered:
In today's digital age, cyber insurance is no longer a luxury but a necessity for organisations of all sizes. It helps businesses recover quickly and effectively. It provides important financial protection and support in case of a cyber incident.
Understanding cyber insurance coverage helps organisations get ready for and respond to cyber-attacks. It also improves overall readiness for this increasing threat.
Organisations can better prepare for cyber-attacks by understanding their insurance coverage. This will help them respond effectively in case of an attack. Contact us at Green Insurance Group today to speak to one of our friendly, professional team.