Cyber threats have become a major concern for businesses of all sizes. From data breaches to ransomware attacks, cybercriminals are constantly finding new ways to exploit vulnerabilities in our online systems. If you own a business, you need to take proactive measures to protect yourself from these threats. One of the best ways to do this is by investing in cyber insurance.
Cyber insurance provides coverage for losses and damages caused by cyber-attacks, including data breaches, business interruption, and cyber extortion. It can also help you cover the costs of legal fees, regulatory fines, and public relations efforts.
In this article, we’ll explore the benefits of cyber insurance and how it can help you protect your business from cyber threats.
What is cyber insurance?
Cyber insurance covers a wide range of cyber threats, including data breaches, business interruption, and cyber extortion. Cyber insurance policies are designed to help businesses recover from cyber-attacks by providing financial assistance to cover the costs of damages, legal fees, and regulatory fines.
Cyber insurance policies can be customised to meet the needs of individual businesses. They can cover a variety of expenses, including lost income, data recovery, and reputation management. Some policies also provide coverage for third-party liability, meaning that if a cyber-attack affects a third-party, such as a customer or vendor, the policy will cover those damages.
Types of cyber insurance
There are several types of cyber insurance coverage available, each designed to meet the specific needs of different businesses. The most common types of cyber insurance coverage generally include:
First-Party Coverage: Financial protection for losses and damages that occur within a business. This includes coverage for data loss or corruption, business interruption, and cyber extortion. It can also cover the costs of incident investigation, lost revenue due to business interruption, ransomware attack payments, and future cyber incident risk assessments.
Third-Party Coverage: Provides financial protection for losses and damages that occur to third-parties, such as customers or vendors. This includes coverage for liability claims, defense costs, and settlements, as well as the costs of legal fees, public relations efforts, regulatory fines, and settlements and court judgements.
Cyber insurance policy exclusions
While cyber insurance policies provide financial protection for losses and damages caused by cyber attacks, there are often exclusions and limitations to coverage. Some common exclusions and limitations include:
Property damage: Cyber insurance will usually not cover physical damage stemming from a cyber-attack, such as hardware that was fried.
Intentional Acts: Cyber insurance policies may not cover losses and damages caused by intentional acts. This means that if a business intentionally causes a cyber-attack, they may not be covered for the damages. However, commercial crime insurance generally covers theft by employees.
Intellectual property: IP theft and lost income associated with the theft are usually excluded from cyber insurance.
How much does cyber insurance cost?
When it comes to cyber insurance, there are several factors that go into calculating the cost of coverage. One of the most significant factors is the revenue of the company seeking coverage. Companies with higher revenues typically require more coverage, as the potential losses from a cyber-attack are greater.
Additionally, the industry in which a company operates can also impact the cost of cyber insurance. Certain industries, such as those in the financial sector, may be considered higher risk and require more coverage than others.
Another crucial factor in determining the cost of cyber insurance is the risk level of the company. This includes factors such as the company’s security measures, past incidents of cyber-attacks, and the amount of sensitive data stored. Companies with weaker security measures or a history of cyber-attacks may be considered higher risk and require more coverage, driving up the cost of insurance.
Why you need cyber insurance
Many Australian businesses are unprepared to deal with cyber incidents; a recent survey showed that almost half of Australian SMEs were not aware of their obligations under the Notifiable Data Breach Scheme, while only 27% had cyber insurance.
Investing in cyber insurance is a proactive measure that businesses can take to protect themselves from these threats. Cyber insurance provides financial protection for losses and damages caused by cyber-attacks, including data breaches, business interruption, and cyber extortion. It can also help businesses cover the costs of legal fees, regulatory fines, and public relations efforts.
In addition to financial protection, cyber insurance policies often come with resources such as risk assessments, incident response plans, and cyber security training. These resources can help businesses proactively manage their cyber security risks and prevent future attacks.
Find the right cyber insurance coverage for your business
Cyber threats are a growing concern for businesses of all sizes. From data breaches to ransomware attacks, cybercriminals are constantly finding new ways to exploit vulnerabilities in our online systems. Investing in cyber insurance is a proactive measure that businesses can take to protect themselves from these threats.
The cyber specialists at Steadfast Solutions can help you find the right coverage, at the right cost. Talk to them today and ensure you’re covered in the event of a cyber incident.