Cybersecurity has become the hot topic of 2020, and soon to roll over into 2021. While many were talking about the cyber-attacks occurring all over the world and increasing by more than 800% in the U.S., another topic just as important was being over-looked. Cybersecurity Insurance.
You heard about the cyber-attacks and data breaches that can come from them, but few have talked about what happens after and how companies deal with the financial fallout that occurs with it. Cybersecurity Insurance provides financial support after a data breach, cyber-attack, and may assist in any financial backing if a ransom is requested (and honored). Without insurance, you may be on the hook for more than just the damages, but also any legal consequences that may arise.
Cybersecurity Insurance is more than just for businesses as well, many homeowners can have it added on to their home insurance for a small additional fee. The coverage is similar to a business coverage, but there are more specific offerings like cyber bullying that is primarily for individual coverage. But let’s look at the key components of each Cybersecurity Insurance offerings:
Business Cybersecurity Insurance
You probably heard about the latest data breaches in the U.S. and the World, like FireEye or Garmin, so you must know that these major companies surely have Cybersecurity insurance. Without it, the companies would be liable for all legal cases from clients, any government fines relating to the breach, and any payments used to recover the data and fix the network systems.
Cybersecurity Insurance is not relatively new, as it has been around since the early 1990s, but as the internet has grown exponentially in just the past 15 years, the mandating of cybersecurity insurance is extremely lacking. In recent years, the idea of mandating cyber insurance has been rising and several companies have seen a better response to cyberattacks through compulsory cyber insurance. The rapid response is due to businesses having first access to cybersecurity experts who can assist them to manage and respond to the incident quicker and mitigate the extent of the damage.
If your company uses the cloud or stores data (databases, etc.) then you need Cybersecurity Insurance. It is very important to know that hackers do not care about what industry/type of company you are, if you store data then you are a target. The reason being is that without your data then you wouldn’t be able to work, therefore if the data was extorted then you would be willing to pay the ransom. Hackers have made cyber extortions into a business model, and companies would rather pay than to risk losing their information or having the extortion become known. This is why it is important that you understand the risks, and know what coverage you need for your business.
Personal Cybersecurity Insurance
There has been a rise in personal cyber insurance, as more and more employees are working from home, and children are learning and socializing through the internet. The benefits of cyber insurance are that it covers a wide range of causes that are very likely to occur to a regular person. Some of these policies are:
- Cyber Bullying coverage
- Cyber Attack coverage
- Data Breach coverage
- Cyber Extortion/Ransom coverage
- Online Fraud coverage
Most of these coverages can be mitigated by using anti-virus software, but cybercriminals are getting better and better every day so anti-viruses may soon not be enough. Additionally, the cyberbullying coverage is ideal for those with middle-school to teenage children as it covers costs for private tutors, relocation expenses, and legal expenses. This does also apply to adults regarding wrongful termination and lost wages, so it is not only for children of a household.
Cybersecurity Insurance is becoming more and more important today as cyber attacks dramatically rise and are more successful. This is a must for any company that handles data through the cloud or network system, as any data is valuable to hackers and especially if they can get paid handsomely for a ransom. Without cyber insurance, if your company was breached, you may never financially recover and would have to close your business. As an individual, this could also be very valuable if you are working from home or have children who are now using social media. There are many benefits to having cybersecurity insurance, and it is always better safe than sorry.