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Why Having Cybersecurity Insurance is a MUST

Zachary Kitchen
August 24, 2022
Why Having Cybersecurity Insurance is a MUST

According to Check Point Research (CPR) 2021 Cyberattacks study, the number of cyberattacks has been increasing. This tendency peaked at 925 cyberattacks per week per business globally at the end of the year.

Cybersecurity insurance is no longer limited to technology corporations, banks, and credit unions. All enterprises regardless of size or industry can benefit from this coverage. According to the CPR study, education/research experienced an enormous amount of assaults in 2021, with an average of 1,605 attacks per organization per week. This is a 75% increase over 2020.

Most businesses question if cybersecurity insurance is even necessary. However, cybersecurity insurance is becoming increasingly vital in today's environment of identity theft, malware, and breaches.

A firm is in charge of its cyber security. However, obtaining the correct insurance will ensure that you are not by yourself regarding cyber assaults. So, how exactly does cyber insurance work?

What is Cyber Insurance?

Cyber insurance (sometimes known as cyber risk insurance or cyber liability insurance) is a type of coverage designed to safeguard your company from digital-age hazards such as data breaches or harmful cyber intrusions on work computer systems.

Cyber liability insurance is essential. At the very least, cyber liability insurance helps businesses comply with state rules requiring them to notify consumers of a data breach containing personally identifiable information. Policies can also include indemnification for legal bills and expenses. 

You can also obtain cybersecurity insurance for software or hardware products you have created; however, in these circumstances, you would require software/product liability insurance instead. Policies also range in terms of who they are intended for—some are geared toward small and medium-sized companies (SMBs), others toward mid-sized firms, and others for huge corporations.

What are Prevalent Types of Cybercrime?

Unfortunately, even the most tech-savvy persons can become victims of cybercrimes. While there are countless sorts of illegal actions that take place online, these are a few common cybercrimes to be aware of:

  • Ransomware; is a sort of virus that infects your computer and encrypts data. The attacker will demand a ransom payment in exchange for the data's retrieval. As a precaution, develop a data recovery strategy and preserve at least one backup of your data.
  • Malware; is the malicious malware that may infiltrate your systems through phishing schemes and software flaws. Once installed, the attacker may monitor internet behavior and steal personal information.
  • Hacking; Cyber hacking is the partial or total acquisition of a computer system or specific functionalities. There are several approaches to doing so. However, the goal is typically to gain access to vital data.

What does Cyber Security Insurance Cover?

Companies are often the target of a cyber assault, whether ransomware, phishing emails with contained software, or even social engineering attempts. And cyber insurance coverage looks to be quite valuable to many of these organizations. However, many organizations still have questions about what cyber insurance coverage covers. The following are what the insurance covers:

Third-party indemnification 

When a hacker steals your data or malware attacks your network and affects other companies, your insurance will compensate those victims on your behalf if you get sued.

Data breach notification

When you learn that sensitive customer information, such as credit card numbers, social security details, personal health information, and so on, has been compromised, you immediately notify everyone involved, including customers who may face identity theft, banks that can freeze accounts, and government agencies if it is related to medical records.

Credit monitoring

They also give credit monitoring services in the event that hacked data makes its way into underground marketplaces such as the dark web.

Defense costs 

If a hacker assaults your website or network with malicious intentions such as ransomware, the insurance coverage will assist in paying the recovery fees.

Assistance with remediation

This item covers all legal expenses related to reacting to attacks and retrieving lost monies and any reputational harm caused by bad security methods.

Coverage of network security audits 

Addresses software vulnerabilities discovered during an audit, such as patching and upgrading systems that hackers may exploit.

Breach containment 

Another advantage of certain providers is breach containment, which assists in limiting the damage by isolating vulnerable machines and shutting them down to prevent additional intrusions.

Bricking 

This improvement covers the expense of replacing technological equipment that has been rendered inoperable due to a malware attack. You'll know where to search for coverage if your laptop or server becomes as valuable to your company network as a masonry brick.

Your business continuity strategy should include cyber insurance. With cyber insurance, you may recover swiftly after an event while saving money because you won't have to pay for expensive business interruption services.

Why Manage Your Cybersecurity with Digital Crisis?

Because we are LOCAL, we can attend to your needs faster when you need us the most. Our specialized cyber risk specialists continually assess the most recent risks and negotiate with carriers to increase cyber coverage.

Every client receives individualized service from us. When you sign up as a client, we become your advocate. Our team of professionals will fight hard for you and address your specific issues. We think of an excellent cyber approach that tackles all areas of your cyber risk—before, during, and after potential assaults. 

Contact us today to schedule a consultation. Call 713-965-7200 or reach us online.

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