We have to admit that data leakage problems are becoming more and more frequent. The number of companies that fall victim to these cyber-crimes is increasing, considering that it is now impossible to do without computers, regardless of the sector of activity. If a hack, a data leak, or a company’s computer system is compromised, the entire business can be slowed down or brought to a halt. It is therefore important to repair the damage and ensure that the computer system is strengthened to avoid consequences related to these attacks. In order to solve this type of problem, it is now common to opt for cyber insurance. What is it? Who can take out cyber insurance?
What is cyber insurance?
Also known as cyber liability insurance, cyber insurance is an insurance policy that aims to protect businesses as well as organizations from the fallout of cyber attacks. By purchasing cyber insurance, you can minimize the business disruption that a company may suffer during a cyber attack. In addition, a cyber insurance is a solution to potentially cover the financial cost generated by the damage suffered during the computer attack.
Generally, cyber insurance covers a company’s liability for crisis involving information systems sensitive. This includes information such as account numbers, credit card numbers, medical data and social security numbers, for example.
What about the limits of cyber insurance?
While it is true that the purchase of a cyber insurance like Cyber Cover provides relief to a business against data breach, cyber liability insurance has its limitations. There are many things that cyber insurance cannot protect a business from. Therefore, it is important for organizations to understand what is covered by cyber insurance and what is not covered. Furthermore, it is important to know that each company is primarily responsible for its own cyber security. Thus, the responsibility for securing sensitive data is not simply transferred to the insurer when you take out cyber insurance.
Who can buy cyber insurance?
Given the importance of computers in all business sectors, there are now a huge number of businesses that may need to purchase cyber insurance to protect themselves from cyber risks that they incur. Companies that send data and all companies that have an online component need cyber insurance. All businesses as well as organizations that use technology to conduct their operations also need to purchase cyber insurance.
Intellectual property, bank data, customer details as well as financial data are all sensitive information that can be targeted by hackers. The main reason why this information needs to be protected is because it is potentially lucrative. Indeed, if stolen, this confidential information can be illegally resold to third parties, which could cause enormous harm to the people from whom the information was stolen.
The case of ransomware
In recent years, the ” ransomware Ransomware” is frequently used by hackers to cripple a company’s computer system. Taking out cyber insurance to cover ransomware attacks can help companies that are victims of these attacks to find a way out of these difficult situations.
It is important to note that, as a general rule, law enforcement agencies recommend that companies that are victims of ransomware not pay the hackers. Indeed, paying hackers is in some ways an incentive for them to do so. However, in order not to have their business paralyzed for an indefinite period of time, most companies do not hesitate to pay.
What situations are covered by cyber insurance?
First and foremost, it’s important to know that liability insurance only covers bodily injury and property damage that results from your products, services and operations. Anything related to the protection of your computer equipment is generally excluded from liability insurance.
In the event of a data breach, it is not uncommon for legal action to be initiated to accurately determine the responsibilities of all parties. By purchasing a contract insurance policy, you can be sure that these legal costs will be fully or partially covered. Apart from that, cyber liability insurance also allows you to :
- Inform customers of a data breach that affects them;
- recover compromised data if possible;
- repair damaged computer systems.
What about the rates of a cyber insurance?
The cost of a cyber insurance policy depends on many different factors. First of all, the size of the company involved and its annual turnover should be taken into consideration. In addition, other factors such as the industry in which the company operates, the type of sensitive data the company manages and the security of the company’s network must be taken into account.
Companies that are known to have poor computer security as well as companies that have already been victims of a sensitive data breach are more likely to pay more for their cyber insurance policy.
Finally, this price increase also affects certain industries. Companies in the healthcare sector and those handling sensitive financial data are seeing their cyber insurance prices rise. The explanation for this phenomenon is directly linked to the very sensitive nature of the data processed by these companies. Indeed, health data as well as financial data are particularly lucrative for hackers who will stop at nothing to obtain them.
What situations are not covered by cyber insurance?
While it is true that cyber insurance offers many guaranteesThis insurance policy is not perfect. Not all forms of cyber-attack are covered by cyber insurance. Financial damages caused by the loss of intellectual property cannot be covered by cyber insurance. A company that is the victim of a cyber-attack can have its reputation severely damaged by the incident. If the company loses customers as a result of the incident, cyber insurance is not able to compensate for such damage.