With cybercrime on the rise, cyber insurance companies have become one of the most important lines of defense against cyberattacks. Not only do they help businesses recover from cyberattacks, but they are also increasingly becoming involved in enforcing and promoting cybersecurity best practices.
Cyber insurance companies provide coverage for a wide range of cyber incidents, such as data breaches, cyber extortion, and computer hacking. They have become an important part of a company’s risk management strategy, as the number of cyberattacks continues to increase.
What is Cybersecurity?
Cybersecurity is the practice of protecting electronic information by mitigating information risks and technical vulnerabilities.
Vulnerabilities can fall into three main cyber categories: cyber breaches, cyber attacks, and cyber extortion. Cyber breaches can include cyber incidents such as hacking or insider theft of data; cyber attacks occur every day with attackers using malware, phishing schemes, ransomware, and other strategies to infiltrate a network; and cyber extortion occurs when hackers demand money in exchange for not releasing sensitive data or shutting down a company’s systems.
What is Cyber Insurance?
Cyber insurance, also known as cybersecurity insurance or data breach insurance, is a type of business insurance that protects companies against cybersecurity breaches and cyberattacks. For example, if a company experiences data loss due to an attack – like ransomware – cyber insurance will provide the funds to recover the lost files.
What Type of Cyber Insurance Does a Company Need?
It is advisable for businesses who are looking for cybersecurity insurance to work with an independent insurance broker. These brokers have connections with dozens of cybersecurity insurance companies, which allows them to find the cybersecurity coverage that best fits a company’s needs. Talk to your IT company about cyber insurance options that they recommend.
Every business will need different types of cybersecurity coverage, depending on what risks are present in that specific business. For example, cybersecurity insurance will vary from small businesses to larger corporations or from retailers to manufacturers. In fact, cybersecurity insurance must be customized for every type of business – which is why working with an independent broker is so important. A broker can find the cybersecurity coverage best suited to a company’s needs and budget by matching the company with cybersecurity insurance companies that provide the cybersecurity coverage needed.
Cybersecurity insurance typically includes six different types of coverage. These coverages include:
– Business interruption coverages (e.g., extra expenses if a business has to temporarily shut down operations because of a cybersecurity breach)
– Breach response and notification costs (e.g., cybersecurity insurance would provide funds to help a company prepare and recover from an attack)
– Cyber extortion (e.g., cybersecurity insurance may cover costs related to paying off cybercriminals if a company’s data has been stolen and the cybersecurity threat demands payment to get the data back)
– Data breach liability insurance (e.g., cybersecurity insurance may reimburse costs if a cybersecurity incident causes legal trouble)
– Payment card industry (PCI) compliance coverages (e.g., cybersecurity insurance would protect against associated costs following a data breach in which credit card information is stolen)
– Network security insurance (e.g., cybersecurity insurance could help pay for an external cybersecurity assessment to determine network vulnerabilities, cybersecurity training for employees, and cybersecurity software)
Best Cybersecurity Practices to Have in Place in Accordance with Cyber Insurance
- Having in place a cybersecurity framework, such as a NIST cybersecurity framework
- Better passwords and multi-factor authentication
- Install antivirus software and
- Regularly monitor cyber risks and vulnerabilities, such as cyber attacks and cyber breaches
How Cyber Insurance Companies Enforce Cybersecurity
Cyber insurance companies play an important role in enforcing cybersecurity best practices. In some cases, they require businesses to comply with certain cybersecurity requirements in order to be covered under their policy. Cyber insurance companies also often provide their own team of cybersecurity experts to help businesses improve their cybersecurity posture.
In addition, cyber insurance companies are increasingly working with law enforcement and government agencies to help investigate and prosecute cybercrime. By working together, cyber insurance companies and law enforcement can better identify and respond to cyberattacks.
Envision Consulting can help businesses to ensure that they are implementing the right cybersecurity practices as well as working with the right cyber insurance companies in order to keep their business safe as well as compliant. For more help with IT services, contact Envision Consulting today!