Let’s start at the beginning. What is Cyber Security Insurance? And is it really worth it? Many face a lot of judgement when this question is broached. Hence, we are taking the bulls by its horns and breaking down the tidbits involved in cyber security insurance.
Cyber security insurance which is also known as cyber liability or data-breach liability. It is beneficial for companies as it provides security of data recovery, in case it is lost due to an attack or accident. This insurance also covers service interruption or network outage. The policies that are formed under this insurance are slightly different when compared to the usual. In regard to property or general liability, the prices and exclusion of the cyber security factors varies among different insurers.
Although, it needs to be noted, that the above-mentioned might cause the policy to become more complex. Though it should ideally not affect business owners. Moreover, it is important for building a detailed strategy for managing the risks and response.
Cyber Security Policy: All That It Offers (Or Doesn’t)
Cyber security insurance is basically divided into two types i.e., first party and third party. There are several insurers who offer policies which are a combination of both of these features. Unfortunately, there are several carriers who write exclusions and provisions into both of these policies. Hence, vendors must read the policies and understand what all has been covered during the time of a security breach.
Cyber security plans usually focus on first-party coverage which most of the businesses need. This is because it helps in protecting against losses that are suffered by the insured. They may include one of the following incidents:
- Assets which might be damaged such as software and data.
- Losing the business opportunities or increment in the operational costs which might be caused due to the interference of the insurer’s computer systems.
- Cyber extortion in case hacker has the data that can used for ransom.
- Cash that is stolen through a digital crime.
- Third-party coverage that is targeted towards companies that manage the software or the network.
- Breaches involved with employee confidentiality.
- Loss of personal data.
- Notification to the customers that follows after a security breach.
- Efforts related to public-relations along with intellectual-property violations.
Cyber Security Insurance: Novice or Oblivious?
The policies that are used in cyber security insurance are new and the process is still in the growing phase. However, these policies do not cover the theft associated with an intellectual property and one might even face issues while claiming for lower sales and damaged reputations. Unfortunately, one is not able to assess the risks involved accurately leading it to becoming a major down point. Items such as product designs, software code, and reputation loss are completely discarded from the process. Businesses can work with a broker who provides the cyber security insurance and has the right experience and expertise in choosing a cyber policy. Moreover, they would be able to give you the right advice on different policies and prices thus helping you to choose the right coverage for your business.
Factors Involved In Deciding The Best Cyber Security Insurance Provider?
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One of the best ways that help in determining the kind of insurance that an enterprise needs is to do a risk and impact analysis. What it basically means is researching and preparing for any future risks or hacks. Along with this the customer data must be reviewed carefully in addition to the intellectual property which should be categorized in terms of high and low risk. Moreover, the areas of vulnerability should also be recognized during this process. Also, the professionals that are involved in any business should visit a legal authority and other departments. This shall help them with an insight into the after effects of a data breach and determine which assets are necessary to safeguard and how.
The Verdict: A Pendulum!
The recent high-profile breaches in many sectors, suggest that the IT industry faces a huge security problem and even the best-funded organizations are quite vulnerable in this regard. Hence, one can almost believe that the cybersecurity industry is running a con game where the sellers lure the customers to buy their products i.e. software that offer no protection. In fact, many are blamed in turn of data mining personal information and data resulting in a scam. Be it the phishing email scams, the Nigerian scam, or the bank and credit card scam, cyber security insurance has been inefficient in protecting the users. This is something that needs to be put in the limelight so that the people can use the Internet carefully. Think twice before investing!