What is Cyber Insurance?
Cyber insurance is a specialty insurance product intended to protect businesses from Internet-based risks, and more generally from risks relating to information technology infrastructure and activities.
Cyber insurance has been around since the late 1990’s when the concept of business information security started becoming more prominent with the widening use of the Internet. The early products of cyber insurance were tightly limited and remained a niche in the insurance world.
However today, cyber attacks are considered one of the more likely risks that organizations and businesses face on a daily basis. The ease of which a cyber attack can be initiated leaves many businesses wondering how they can even be protected in the first place. The business world is moving exclusively digital and the majority of critical business information and operations is now done through databases. What would be the effects to your business if someone stole that database? How much would you be willing to pay if it were held for ransom? How long would it take you to rebuild that database? How much downtime would you incur until your operations were able to resume?
These are real questions that businesses need to be asking themselves. Additionally, businesses should develop a thorough Business Recovery Plan that includes roadmaps for the most common cyber attacks such as:
- Denial of service attack: The hacker floods a website with more traffic than it was built to handle, making it impossible for legitimate visitors to access the site.
- Phishing: An attacker pretends to represent a trusted organization to trick a user into taking an action (such as opening a malicious attachment or clicking on a bogus link) that he or she would normally not take.
- Malware: Harmful software takes control of a machine, monitors user actions and keystrokes, and/or sends confidential data from the infected computer or network to the attacker’s home base.
- Ransomware: This software encrypts files to prevent users from accessing them and then demands payment for their safe recovery. These attacks can occur after clicking on a phishing link or visiting a compromised website.
- Spoofing: A cyber criminal impersonates another user or device to attack network hosts, steal information, spread malware or bypass access controls.
- Brute force: The attacker attempts to decode encrypted data by trying as many password combinations as possible, as quickly as possible.
With a strong Business Recover Plan and applicable insurance policies for the different disaster scenarios, businesses can resume operations with little to no downtime.
What can cyber insurance cover?
- Regulatory defence expenses: Civil fines incurred in responding to a regulatory proceeding resulting from a privacy or network security breach
- Legal and civil damages: The cost of legal representation and possible damages related to a privacy or network security breach
- Security breach remediation and notification expenses: The costs to notify affected parties and manage a privacy incident
- Crisis management expenses: Public relations expenses to manage the damage to your organization’s reputation
- Forensic investigations expenses: The costs of hiring a breach response firm
- Computer program and electronic data restoration expenses: Expenses to restore or recover damaged or corrupted data caused by a breach, denial-of-service attack or ransomware
- E-commerce extortion and reward payments coverage: Pays for the cost of a professional negotiator and potential ransom payments to the person or organization extorting you or your organization
- Business interruption and additional expenses: Income your business loses and the costs it incurs due to an interruption in services
Some cyber-insurance policies will require your business to implement certain defensive and offensive cyber security measures as a condition for coverage. If you don’t know where to start with these measures, book an assessment with one of our certified experts now and we can help navigate any of your insurance requirements! Book Now