Why Your Business Should Invest in Cyber Insurance
Unfortunately, data breaches and other cyber attacks have become far more common in recent years. A quote from the former Director of the FBI, Robert Mueller, puts the growing problem into perspective:
“I am convinced that there are only two types of companies: those that have been hacked and those that will be. And even they are converging into one category: companies that have been hacked and will be hacked again.“
A recent study included in the annual Hiscox Cyber Readiness Report shows that 71% of US businesses are likely to pay a ransom fee to get their data back when they have suffered a ransomware attack. The same report found that among small businesses with fewer than 250 employees, the average reported cyberattack cost was about $25,600. Cyber liability insurance can protect your business against the expenses associated with a data breach as well as other risks you may not have considered.
What is cyber insurance?
According to the US Cybersecurity and Infrastructure Security Agency (CISA), cyber insurance mitigates losses from cyber incidents like data theft, extortion demands, hacking, denial of service attacks, crisis management activity related to data breaches, and legal claims for defamation, fraud, and privacy violations. Cyber insurance policies also cover the costs of recovering data, system forensics, legal costs, customer reparations, and more.
Do I need cyber insurance?
If your company relies on computers to accomplish day-to-day operations, having a cyber policy is typically a good idea. Even if you do not save social security numbers or medical information, you may have credit card information, sensitive customer information, or be vulnerable to a ransomware attack. Hopefully, you'll never have to use it, but the odds are stacked against you. The chances of winning the Mega Millions jackpot are one in 302,575,350; the chances of a cyber event occurring at your company are 7.5 out of 10.
How Much Does Cyber Liability Insurance Cost?
The cost of a basic cyber insurance coverage plan will be determined by a number of factors, including your industry, the amount of data on your computer system, your annual revenue, and possibly the cyber security measures you presently have in place. Because of the amount of competition in the market, cyber plans are nowadays very reasonable. For a small firm, they can start at less than $1,000 per year. When compared to the expense of a breach, it's a small but worthwhile investment.
How cyber insurance and cyber security go hand-in-hand
A cyber insurance policy does not replace preventative cybersecurity measures. Cyber liability coverage often necessitates the adoption of preventive measures to get coverage in the first place. Ultimately, strong cybersecurity leads to lower cyber insurance costs, and good cyber insurance means better cybersecurity in the event of an unexpected incident. To minimize and prevent cyber attacks, any business considering a cyber insurance policy must couple it with an investment in preventative cybersecurity measures such as the type Red Sea Information Security offers. We offer services in Penetration Testing, Auditing, Network Assessment, and Generalized Information Technology support which includes Security Awareness Training to prepare and be proactive against cyberattacks.