The recent increase in cybercrime is leading more and more businesses to invest in cyber insurance policies. Are you considering cyber insurance to protect your business? If so, do you know what to look for in a cyber insurance policy? This article will help you understand cyber insurance and guide you on how to create a cyber insurance coverage checklist.
Is Cyber Insurance Necessary?
Imagine this: Your small or medium-sized business is thriving, then one day, without warning, your digital assets are held hostage by ransomware attacks.
Not good, right?
Sadly, it’s an all too common tale in today’s digital landscape. Cybercriminals are increasingly looking to exploit any vulnerability. In 2022, small businesses spent an average of $18,000 per attack, and that number is expected to rise.
Other cybersecurity statistics you should be aware of:
- Globally, 30 thousand websites are hacked each day.
- 64% of companies experienced an attack in 2022.
- 43% of cyberattacks target small businesses.
- 94% of all malware access points are through email.
Numbers like these are precisely why businesses are investing in a comprehensive cyber insurance policy.
What is Cyber Insurance?
Cyber insurance, also known as cyber liability insurance, is a safeguard. It’s a protective layer designed to cover the cost of damages associated with cyber attacks. From ransomware attacks and social engineering tricks to data breaches, cyber insurance covers unseen threats new to our digital age.
A comprehensive cyber insurance policy can cover a range of cyber crimes, including:
- Ransomware attacks
- Data breaches
- Social engineering frauds
- Network security breaches
- Business email compromise
- Business interruptions
- Hardware damages
- Litigation fees
- Penalties or fines from regulatory bodies
- Crisis management costs
Who Needs Cyber Insurance?
In today’s digital era, if you conduct business online or store sensitive data electronically, you need cyber insurance. For many businesses, cyber insurance is not a luxury; it’s a necessity.
Different industries have varying cyber insurance coverage policy requirements, each with unique vulnerabilities. A healthcare provider managing sensitive patient data, a retailer handling credit card information, or a tech company with valuable intellectual property – all have distinct risks and consequently, different insurance needs.
Failing to have the right insurance coverage can mean business interruptions, loss of revenue, and even loss of clients. Cyber insurance helps ensure that even if a breach does occur, you’re equipped to respond and recover effectively.
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Cyber Insurance Coverage Checklist
You’ve recognized the need for cyber insurance – that’s excellent. Drafting a cyber insurance coverage checklist is a crucial step to identify your specific needs.
Let’s break it down:
- Understand Your Risks: Recognize the specific cyber threats your business might face. Is it data breaches, ransomware attacks, social engineering or another type? What type of IT infrastructure does your business have? Do you have cloud-based solutions? And, how wide is your attack surface?
- Identify Valuable Assets: Pinpoint the digital assets that are vital to your business operations. It could be customer data, intellectual property, or your network infrastructure.
- Evaluate Potential Business Impact: How disruptive would a cyber attack be to your operations? Could it lead to prolonged business interruptions, lost revenue, or damaged reputation? Be sure to consider any compliance requirements your company has to keep up with and ensure your policy will cover fines if you’re found to be non-compliant.
Cyber Insurance Policy Requirements Checklist
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Understand Your Risks |
Identify the specific cyber threats your business might face. |
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Identify Valuable Assets |
Pinpoint the digital assets that are vital to your business operations. |
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Evaluate Potential Business Impact |
Assess how disruptive a cyber attack would be to your business operations. |
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Review Coverage Scope |
Confirm if your cyber insurance coverage policy meets contract or regulatory requirements. |
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Incident Response Coverage |
Check if your policy covers the cost of an incident response. |
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Crisis Management Coverage |
Verify if your policy covers the cost of crisis management post a cyber attack. |
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Recovery Costs Coverage |
Ensure if your policy covers the cost of recovery from a cyber attack. |
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Third-party Coverage |
Confirm if your policy includes third-party coverage for any legal liabilities arising from a cyber incident. |
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Business Interruption Coverage |
Check if your policy covers lost income and increased costs of operation during downtime caused by a cyber attack. |
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Emerging Threat Coverage |
Verify if your policy covers losses from emerging and zero-day threats. |
Cyber Insurance Coverage Mistakes to Avoid
To ensure your business stays resilient in the face of cyber threats, it’s vital to avoid these common cyber insurance coverage mistakes:
Not Getting Enough Coverage
One of the biggest blunders is underestimating the amount of cyber insurance coverage needed. Cyber attacks can result in significant losses, and skimping on coverage can prove to be a costly mistake.
Not Updating Your Policy
As your business evolves, so do its cyber risks. Cybercrime is constantly changing, and your policy must adapt to provide adequate protection. Regular policy reviews and updates are critical.
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Failing to Disclose Cyber Risks
Transparency about your business’s cyber risks when applying for insurance is non-negotiable. Non-disclosure could void your policy when you need it most.
Not Having a Cyber Security Plan
Having cyber insurance doesn’t negate the need for a cyber security plan. A robust security strategy can help prevent attacks and minimize damage if a breach occurs.
Not Asking Enough Questions
When procuring a cyber insurance policy, it’s important to ask questions. Understand if the coverage is right for your business, learn about policy limits and options.
Be sure to have a clear understanding about:
- Third-party vendor coverages
- Deductible amounts
- Any cybercrime exclusions
- The claims process
- Response times
- Policy costs
Attentus Tech is Here To Safeguard Your Business
In this digital age, resilience and security are paramount. That’s where Attentus Tech steps in. With comprehensive cybersecurity services, Attentus Tech offers the tools and expertise you need to protect your company. Remember, your business deserves the best defense.
Choose wisely, choose Attentus Tech.