The Importance of Cyber Insurance
The Importance of Cyber Insurance – in Life & in Business
In recent years, there have been major historical events that have wrought detrimental effects on every nation. From the global COVID-19 pandemic to the recent Russian forces’ invasion of Ukraine in late February, no one has been left unaffected. One of the major (and possibly unprecedented) impacts of these major events is the unexpected threat of cybercrime.
The conflict in Ukraine now presents one of the largest risks to western corporations and even personal households than possibly ever before. Due to dramatic sanctions imposed upon Russia, it is expected that a response will be issued – likely utilizing Russia’s cyber capabilities.
This heralds dramatic exposures for both businesses and families alike. We are seeing Ukrainian financial institutions attacked and a number of United States corporations noting potential “cyber probing.” Over 25% of business owners and executives are anticipating that their budgets for cybersecurity protocol may go up by double digits throughout the year to account for shifts and technological developments.
What do we do to address the growing risk of cybercrime? To start, we can examine the benefits and protective capabilities of a solid cyber insurance plan.
What is Cyber Insurance?
Cyber insurance is a specifically designed insurance product used to protect businesses and households from risks they may be exposed to while utilizing information technology.
This policy is purchased as a business’ regular commercial general liability insurance may not cover losses such as extortion, hacking, ransomware, and data destruction, nor will it cover any lawsuit claims that may result from the loss or theft of private data, failure to safeguard data, as well as investigation expenses, recouping public relations, and more.
In recent years, cyber policies have gained popularity as the threat of cybercrime grows exponentially. Small businesses, which may not see the benefit in such an insurance policy, are just as much at risk of a cybercrime event, if not more than larger firms due to a lack of adequate cyber security protocols and measures.
Cyber insurance can be purchased for businesses, but it can also be purchased for households and individuals. Here’s the difference:
Personal Cyber Insurance for the Household
Rises in phishing scams have not been exclusive to businesses alone. Personal cyber insurance protects your electronic data and sensitive home networks from cyber attacks, cyber extortion, data breaches, online fraud, and more. We may rely on technology more now than we ever did before, making it imperative that we include some form of coverage on our home insurance – especially if we work from home. Any computers or connected devices may be exposed to potential malware viruses.
Personal cyber insurance may cover any costs related to data loss or destruction, extortion costs, ransomware, and recouping lost funds following a cyber event.
Commercial Cyber Insurance for Businesses
Cyber insurance for businesses is a necessity for any firm that relies on technology – no matter for what task. The average cost of a data breach, according to the Canadian Centre for Cyber Security, is roughly $6 million per breach.
Provided recent events, cyber attacks have been increasing in frequency – making it even more essential for enterprises to purchase a base layer of commercial cyber insurance. For businesses, cyber insurance may cover these initial and post-attack expenses:
- Regulatory fines
- Forensic investigation costs
- Notary fees
- Breach response costs
- Computer replacement
- Cyber extortion
- PR expenses for business reputation
- Lawsuits resulting from the attack
- Credit monitoring for individuals who were targeted
- Privacy attorney
Technically, cyber insurance policies may vary by insurer, so it’s important that you connect with your broker to discuss your coverage to know what you’re covered for.
Cybersecurity for at Home & in the Office
Cyber insurance is a must, but it should only be used as a backup and not something you should rely upon. Your organization – and your household – should be employing preventative measures to ensure your risk of a cyberattack is greatly reduced. Consider the following measures:
- As a business owner, ensure that your employees are up-to-date and informed on modern cybersecurity measures. Consider implementing a cybersecurity course to ensure that your workers know how to identify a potential phishing scam.
- Ensure your software is up-to-date, at home and in the office. Make sure that you have installed the latest security updates for your network, and use web browsers that automate security updates whenever they are available. Ensure that you have automatic updates turned on for your operating system(s).
- Teach your household how to identify phishing scams, including malicious emails and phone calls. This is especially important for young children or even elderly relatives who might be utilizing your technological devices.
- Practice good cyber hygiene. Use strong passwords and multi-factor authentication for your different accounts and encourage family members and/or workers to do the same.
- If you are working from home, ensure that your network is secure and never download any attachments when on public Wi-Fi. Encrypt your data where and when possible.
- Back up your household or organization’s data. If an attack does happen, the easiest way to deal with the issue is to erase and restore the system entirely.
The stakes can be high, whether you’re an individual living in a household or a business executive. Cyber breaches are costly, and they can be detrimental – in life, and at the office. Ensure you are taking the correct measures to ensure that your business and home life are secure.
Cyber insurance is a great way to preserve your peace of mind and can offer you coverage in the event something does happen.