Cyber Risk Insurance: What Is It? Why Do You Need It? How to Choose?
What is Cyber Risk Insurance?
In today’s world, it’s hard to think of any business that isn’t reliant on technology, especially the internet—the digital super-connection that connects all devices. Invariably, this creates a cyber-risk whereby your private data and normal business functioning could come under attack by a cyber-criminal.
Cyber risk insurance is typically designed for organizations to provide protection against cyber-security related risks. It helps you keep your business running in the event of a cybersecurity breach and is generally designed to help businesses address any expense that might occur as the result of a data breach, including forensic investigations, business losses, and notification expenses, as well as addressing lawsuits and extortion attempts.
Cyber risk insurance provides a wide range of coverage against the business losses that might occur as the result of data destruction, data theft, hacking, extortion, including forensic investigations and DoS attacks. Its coverage also encompasses the losses caused by errors and omissions, failure to protect the data, and defamation. Besides, its additional benefits also include the coverage of post-incident public relation expenses, regular security audits, and other expenses.
In addition, one can also buy a personal Cyber risk insurance policy to secure a person’s personal digital identity and data from online threats.
Why does your organization need cyber risk insurance?
Every organization that uses technology to do business faces cyber risk. In today’s world where almost, every business is going digital and many are shifting to cloud-based solutions, it is impossible to isolate from online communication or be immune from cyber risks. According to “The Economic Impact of Cybercrime –No Slowing Down Report,” it was estimated that cybercrime might cost have the world $600 billion in 2017. It was almost double the loss caused by natural and man-made disasters, combined.
Therefore, it is critical for organizations to embed cybersecurity risk management policies and measures at every level. Cyber risk insurance can help you maintain the continuity of your business in the event of cybercrime. Just like other types of insurance, you transfer some of your risk to the insurance company via cyber risk insurance so that you don’t have to incur the loss when a data breach occurs.
What to look for in Cyber Risk Insurance? How to Choose?
In Dubai, you will find various insurance companies offering cyber risk insurance. Similar to any other business insurance, the coverage of cyber risk insurance also varies based on the insurer and policy types.
While selecting a cyber risk insurance coverage, ask the following questions so that you know you are picking the right product for your organization:
- Does the insurance company provide one or more types of standalone cyber insurance policies? Or, is this coverage simply an extension of existing policy? A standalone policy is considered to be the best and most comprehensive.
- Does the insurance company customize the policy based on your organization’s needs?
- What are the deductibles? Just like you have deductibles with health or auto insurance policy, be sure to compare deductibles among insurers closely.
- How does cyber risk insurance coverage and limits apply to first and third parties? Does it also cover the third-party service provider? Find out if your service providers have cyber insurance and if not, how this will affect your agreement with them.
- Does the policy also cover non-malicious actions performed by an employee? This is a part of the Errors & Omissions coverage.
- Does the insurance cover social engineering along with network attacks? Social engineering involves all kinds of attacks, such as phishing and advanced persistent threats.
While you can go it alone and prepare a list of the questions mentioned above, you can also work with New Age Insurance Brokers who can help you with the above. Our specialized team will conduct a thorough due diligence process to understand your cyber environment and recommend the right kind of plan for your organization.