What is cyber insurance?
Cyber insurance protects your organization from liability in the event of a cyber attack. Nearly 60% of business leaders report that their organization has cyber insurance coverage worth over $10 million.
Over the next several years, 60% of organizations anticipate increasing their cyber insurance spend. Investing in cyber insurance transfers business risk, and allows organizations to better protect their financial health.
Isn’t that what a general liability policy is for?
General liability insurance covers claims related to property damage and physical bodily injuries suffered while on the job. Rarely does general liability insurance cover cyber attacks.
What’s covered by cyber insurance?
Cyber insurance can cover physical damage to your computers and devices due to a breach. It may also cover the costs of hiring incident investigators, the costs of business disruption, and those of data recovery.
In addition to assisting with your organization’s expenses, cyber insurance can cover any adversely affected third-parties, assisting with their legal fees, settlement costs, and media liabilities.
What types of organizations can benefit from cyber insurance?
Any organization that collects and stores sensitive information, from credit card information to home addresses, can benefit from cyber insurance.
How should decision-makers go about selecting cyber insurance policies?
Ask questions. These include:
- How much will a given policy charge for deductibles?
- What are the coverage limits? Does coverage include third-party groups?
- What are the exemptions in the policy?
- Does a given policy cover all types of cyber attacks, or only certain types?
- Does the policy cover accidental human errors that precipitate a cyber attack?
- Certain types of attacks occur over the course of months or years. Does a given policy show limitations related to attack timeframes?
- How would a cyber breach impact a given policy’s premiums?
What is the average cost of cyber insurance?
The cost of cyber insurance differs from one organization to the next based on a confluence of factors. Cost is assessed in relation to the types of sensitive data that your organization stores, revenue, claims history, and more. The average organization selects cyber insurance coverage limits of roughly 0.14% of revenue.
What else should C-levels know about cyber insurance?
Cyber insurance is not a substitute for strong cyber security. Cyber insurance groups will not approve claims if an organization does not implement standard cyber security platforms, employ well-trained security leaders, and follow through with education and awareness initiatives. The purpose of cyber insurance is to protect your organization in case all prevention platforms, mitigation strategies, and best practices fail.
At the same time, under certain circumstances, “It’s virtually impossible to stop all successful attacks no matter how good one’s cybersecurity efforts,” says the Head of Analytics for the Global Cyber Insurance Team at AIG. “As such, firms should focus on resilience- getting back up and running quickly.”