What is Cyber Insurance and Why is it Important?

You may have come across the term “Cyber Insurance” before, but what exactly is Cyber Insurance and why is it important? Cyber Insurance is a specialty insurance that is offered under General Insurance, and it provides financial coverage to businesses in the event of losses due to cyberattacks, data destruction, extortion, data theft, privacy investigations, and lawsuits following a cyberattack.

So why should you have Cyber Insurance for your business?

1.?Insuring businesses against data losses?– Technology is the driving force of many businesses worldwide, and some businesses may even operate only virtually, with no physical location. With online business practices comes certain levels of risks, such as hacking or attacks by computer viruses that could result in loss of crucial data. With Cyber Insurance, you are given financial coverage to cover the costs of such losses to help you get your business back up and running.

Data loss is one aspect of cyberattacks and occurs when valuable and/or confidential data is compromised by cybertheft, computer viruses or malware. Data loss is expensive and results in millions of dollars in damages every year. This has led companies to initiate secure data protection practices and obtain coverage via cyber insurance policies.

2.?Data Restoration?– Data is extremely valuable and can even be taken as currency in our digital world. This is what makes data theft a lucrative career for some who seek to steal and sell companies’ data for financial gain. With Cyber Insurance, you are given financial coverage to compensate for losses incurred in the event of data theft or loss, which assists with data restoration. Data, particularly third-party data can be likened to currency based on this value and this leads to a high demand for it on the black market.

?3.?Loss of revenue incurred due to cyberattacks?– Businesses use electronic systems to handle day-to-day activities, such as point-of-sale machines and cloud storage, and these systems form the backbone of the business. As these systems depend heavily on the internet to operate, this makes them susceptible to cyber attacks by hackers or computer viruses, which could result in total shutdown of a business, and lead to loss of revenue. Cyber Insurance covers the lost profits associated with cyberattacks and cyber-related damages to your business,giving you peace of mind that your business’s losses are handled.

InfoBit?– What is Business Interruption Insurance? Business Interruption Insurance is a form of general insurance that replaces the loss of business income owing to an interruption in business. This interruption includes the effects of natural disasters or fallout stemming from natural disasters. There is also extended coverage clients can opt for under their Cyber Insurance policy, such as Digital Media and Cyber Extortion.

Digital media covers damage and defense costs in connection with a breach of third-party Intellectual property or negligence in connection with electronic content such as email content or your promotional material. The cyber extortion covers losses resulting from an extortion threat which includes extortion payments and costs in managing, mediating and negotiation to end the security threat.

Electronic systems are now not only a necessity in our day to day lives, but also for the smooth running of businesses. This necessity is why it is important for you have a comprehensive Cyber Insurance policy to ensure that you are adequately protected.

Thank you for joining us for this week’s article. We wish you a safe and enjoyable weekend and do join us again next week for more!