Preventing data breaches and the practice of protecting systems from online attacks is the biggest task in the booming cyber world. Digital attacks are usually aimed at data manipulation, data theft, and money extortion from users. The primary target of these attacks is business hubs. Recent development and emerging trend of digital adoption opened several doors to cyber criminals. Cyber Security Insurance plays a vital role in risk management and regulatory compliances.
What is Cyber Insurance/Cyber Security Insurance
Cyber Insurance is cyber liability insurance that helps to reduce financial losses in the event of cyber attacks such as ransomware attacks and data breaches. Cyber Insurance works as immunity to business while adopting cyber security measures. Increasing remote desktop threats, ransomware attacks, and financial data theft, or loss have increased the need for cyber security insurance and it also increased the insurance costs to businesses.
Pros/What does cyber Security Insurance Covers
Cyber insurance covers a liability that arise due to a data breach such as compromised privacy, financial loss, or any other personally identifiable details leak by cyber attack.
Free Identity Restoration and Credit Monitoring Services
In the event of identity theft, insurance companies may cover the cost of identity restoration services and also offer interest-free credit monitoring services for some time.
Reimbursement of Legal Fees
If a cyber attack leads to privacy violations such as wrongful divulgence, theft, and misuse of confidential data of a customer takes place and if a customer files a case against the company then the insurer may provide free legal support to the policyholder.
Free Forensic Fees
After a data loss or cyber security compromise, a computer forensic expert will be hired from the insurer’s side to recover the stolen data.
Free Cost of Restoration
After a cyber attack, there must be a need for forensic auditing of the computer system, network, and other storage devices. And repair and replacement costs of systems may be covered by an insurance company.
Cons/Limitations of Cyber Insurance.
Several factors and issues act as limiting factors to getting covered under cyber insurance.
Cyber Security Procedures Implementation
If any company applies for cyber security insurance, their systems, network, and software must undergo a full security audit, and it must be fully secure and get a security audit certificate. So before applying for insurance a company must adhere to the security protocols suggested by an insurance company.
Cyber Insurance Cost
Cyber security insurance costs are very high, and cost is the major factor which preventing insurance companies expansion and growth. Insurance premium costs are increased at the rate of 20% with in two year as per records of USA cyber insurance agencies.
Cyber Security Insurance cover is excluded from preventable Security Issues
- Cyber insurance is not covered if any lapses occur by human error. Any data loss that happens due to misconfiguration or negligence of the policyholder.
- Prior security breaches that happened before purchasing insurance, will not be covered. If a company network or system already compromised state and it is not detected or intentionally not reported in a prior security audit conducted by the company and a cyber attack happens after purchasing insurance, then such claims will be rejected.
- Data or security breach loss happens due to companies infrastructure failure, in such cases also insurance will not be covered
- The company fails to upgrade or apply the latest security measures from time to time as per insurer guidelines, in that condition also claim will be rejected.
- If a cyber attack happens from an insider or employee who is responsible for data theft or data loss, such cases will not be covered cyber security insurance.
What should you know before buying cyber Insurance
Make sure that it covers Data Theft, Ransomware cover, Free Data restoration cost, and immunity towards legal proceedings if any privacy breach occurs by a cyber attack.
Can I use Cyber Insurance as a defense against cyber-attack?
No. Cyber Insurance can only be used as one of the risk management measures.
Why Cyber Insurance costs are two high.
Because cyber attack is considered inevitable due to the rise of ransomware and cybercrime these days. An Insurance companies risk is very high if a cyber attack leads to a financial loss.
What is comprehensive Cyber Insurance
Comprehensive cyber insurance is used as protection for both the first and third parties. i.e It covers companies and also compensates their clients/customers if an attack causes damages to both parties.
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