Why Companies Need Cyber Security Insurance
Cyber security insurance is all too common for small businesses. In simple terms, cyber security insurance insures you against the cost and damages of a cyber attack. These cyber security attacks include hacking, data theft, ransomware, and downtime issues. The idea of this coverage is to cover you and everyone who owns the data.
This can include physical damages, lost revenue, and more. The damages also relate to customers and clients. This is because their data may be stolen, or someone may have used their data to cause harm. Depending on the contract you have with them, you may have some liability for the damage that customers face.
What does Cyber Security Insurance Really Entail?
Cyber security insurance comes into play when an unauthorized party gains access to digital assets on your enterprise networks. A cyber security insurance policy can cover you against many types of data breaches. These types include phishing scams, hardware malfunction, malware attacks, and more.
An example of a digital asset could be an employee record, sensitive information, financial statements, and more. If assets such as these get into the hands of hackers, they can extract revenue from your business by holding them at ransom. Even if they do not ask for ransom money, they can damage these datasets to cause your business harm.
In both instances, you will suffer damages in terms of costs and reputation, and this is where cyber security insurance will come in handy. It will cover for losses and help a business get back up and running so that it can manage downtime costs and damages.
How does it Work?
If you are shopping for an insurance policy, it will feel similar to a retail experience. It’s similar to when you have a car, so you go to a website and make a little price comparison and select an insurance policy. But when you’re looking for cyber security insurance, it’s a different process and mechanism.
Generally speaking, when an organization is looking to purchase cyber insurance in the US, it needs to have a broker. This broker or third-party entity will usually mediate between the company and the insurance provider. The job of the mediator is to ensure that the client is getting the best insurance policies, not just in terms of the cost but also coverage.
They can also help companies negotiate the best insurance policy, coverage, and more. Therefore, getting cyber insurance requires companies to seek third-party assistance from the client to the carrier. The client and insurance carrier don’t communicate directly and usually do so through a broker.
Cyber Security Insurance Landscape
Since there are many cyber security insurance vendors in the industry, choosing the best ones can be very difficult for you. One of the issues in the cyber market itself is that there is no consistency across the board in terms of the policy. This can make it difficult for consumers to pick the best insurance policy for them.
What are the Risks and Vulnerabilities?
If you are considering getting cyber security insurance, or whether or not it is applicable to you, you should first look at your risk factors. There have been many cyber attacks in cyberspace. So, do you really need cyber security insurance? Cyber security insurance helps companies respond to cyber security attacks or data breaches.
As your company begins to grow and starts utilizing devices and applications, it becomes more vulnerable to cyber-attacks. This is when you may need insurance and coverage for cyber security and threats. Companies that face frequent cyber attacks can greatly benefit from such coverage.
In the instance of a cybersecurity breach that will lead to plenty of costs, a company will likely not have the resources to cover data damage. Businesses that must have a cyber security insurance mechanism are ones that have personally identifiable information or (PII). This is data that includes information perpetrators can use to identify a person.
In other words, this pertains to personal information that an offender can use to track down a person. This includes social security numbers, bank account numbers, and more. A phishing attack usually takes place when hackers are trying to steal this type of data. A phishing email is one in which a hacker will falsely claim to be an authorized entity so that you can provide them with personal credentials.
This deceptive method is also one that hackers use to conduct a ransomware attack. The best way to protect against these attacks is to have internally sound security systems, along with comprehensive cyber security insurance policies.
Other companies that may need cyber security insurance are ones that are located in dangerous neighborhoods, where hardware theft is all too common. Other times you may need cyber security insurance is when your business is vulnerable to data loss due to natural hazards.
Overall, a company should always be looking to take security measures into account to avoid any instances where they have to cash in their coverage. For instance, they should deploy superior cyber security layers of protection, along with deploying top monitoring. Other steps can include training staff members to avoid negligence and changing passwords often.
Prescient Solutions can Help You Pick the Best Insurance
Prescient Solutions have been operating in the cyber security sector for many years. We have used our technical expertise and partnerships to equip businesses with insurance carriers and policies that are tailored to their requirements. Our cyber security and risk assessment enable us to negotiate a cost-effective yet comprehensive insurance policy for our clients.