The internet is a beautiful place, agreed, but it is also crawling with risks. Hackers are increasingly growing in sophistication such that the internet is far from that secure and blissful “digital paradise” it was back in its early 1990 days.
Do you know that cyber-attacks cost the global economy a monstrous $600bn every year? What more, since the outbreak of the pandemic, the FBI has noticed that cyber-attacks sprang up by 300%. Alarming, isn’t it?
All these point to the ever-urgent need for cyber-specific insurance. More companies are beginning to see the need to protect their cyber liabilities, with the global cyber insurance market gaining significant momentum.
The urgent need for cyber-specific insurance
Cyber-specific insurance is mitigating the extent of damage you could suffer from data breaches as typical of cyber-attacks. Of course, no private equity cybersecurity structure is 100% impenetrable. It is often not a question of if you would be compromised; it is more of when.
Consequently, the need for cyber-specific insurance has substantially consolidated across the last two decades, owing to the lack of dedicated insurance coverage of cyber-related risks.
This was a need traditional insurance providers appeared unfit or unwilling to assuage as there was such a paucity of streamlined insurance policies for cyber-specific risks. These risks included hacking, data damages, theft, and the infamous DOS attacks.
Today we have providers of cyber-specific insurance exclusively attending to compensating you for damages arising from a compromise of your cybersecurity management.
You would be catastrophically wrong to think that this type of insurance is only needed by online businesses. The world we live in today is so digitally synced.
Even as a contemporary brick-and-mortar business, you leverage digital solutions every day like using computerized payroll systems and using PDQ machines for client payments.
In one way or another, there must be an incursion into the cyber world, which comes with its substantial risks. Hence the need for this type of insurance. Don’t think either that because you are a small business, you aren’t attractive to cybercriminals.
Reports show hackers going more for the low-hanging fruits in terms of smaller businesses with more porous IT cybersecurity management. Maybe you should know that 43% of cyber-attacks are targeted at small businesses.
So here is the ugly truth: big or small, offline or online, your business has significant cyber liability risk — perhaps unless you don’t have a smartphone at all. But can you be that boringly old-school?
What could your cyber-specific insurance cover?
Agreed, the insurance market (covering the digital world) is not fully established when measured to the traditional offline insurance market. Nonetheless, there are already several attractive policy options for you to pick from.
The policy you pick could give you coverage from 1st-party to 3rd-party liabilities. Here are some of the most prevalent sectors covered by most cyber-specific insurance policies.
Coverage for security and privacy
Crisis management in the incidence of a data breach is crucial and, of course, expensive. Some jurisdictions require you to notify your clients when data breaches occur and consequent loss of data.
Such extensive notification campaigns could milk you of thousands. In cases of such data security breaches, the responsibility could be on you to manage and alleviate the consequent damages. This could extend into you paying for monitoring your customer’s credit even as far as paying for preventing the theft of your customers’ identity.
However, it gets much easier with a cyber-specific insurance policy. Such a policy can also manage the PR storm that naturally accompanies data breaches, even if it means manipulating the news.
Coverage for settling ransomware
Coverage for ransomware attacks should be an essential part of your policy. No one prays for these attacks, but when they happen, and the hacker locks you out of your system for a significant price, your cyber-specific insurance provider steps in.
Your provider could either pay the ransom stipulated by the hacker – however hefty – or bring on an all-expense-paid security expert to track your extortioner.
Coverage for downtime and repair costs
Data recovery and restoration of compromised hardware systems could come at a high cost if you would individually shoulder such responsibilities. Your policy could relieve you of this.
Also, some breaches could result in devastating downtime (as is typical of DDoS attacks), sometimes running into days. Some of these disruptions may require you compensating your customers, aside from a direct loss of operating income for your business continuity plan. A good policy could save you the financial consequence of such compromised cybersecurity management fallout.
What is the cost of cyber-specific insurance?
As you would expect, these policies’ cost differs depending on the extent of coverage and the magnitude of incidence. Some businesses pay premiums as high as $1 million annually, while on the other end, some companies may end up paying a few thousand dollars.
The extent of risk exposure rightly determines the cost of policies. This is in terms of the formidability (or otherwise) of your current cyber-defense architecture.
Before they give you quotes, most providers carry out a comprehensive on-site audit of your overall security infrastructure, extending to how robust your recovery and backup systems are.
The more fortified your systems are to virus attacks and hacker penetration, the lesser premium you can expect to pay. Of course, most policies come with exceptions given the relative dynamism of cyberspace.
Most of these exceptions border on social engineering. You can expect to pay a higher premium or even totally lose out on insurance coverage when you (or your staff) download a bug.
There are several cases where businesses have paid their hard-earned dollars for duplicated insurance. This is them paying multiple providers for covering the same aspects.
It makes enormous sense if you can work with a genuine and seasoned cyber-specific insurance broker. This expert can thoroughly inspect your existing policy for holes that could possibly be plugged by a secondary insurance plan.
How can Triada Networks help with cyber insurance?
We work with several insurance and secure cloud partners and can also work to have your current policy reviewed to see if you have the proper coverage. We are here to make sure that you are protected and provide you the very best insurance for your business.
If you are interested in learning more about what Triada Networks can offer your business for cyber insurance we’d be happy to set up a free consultation. Give us a call at 201-297-7778 or go online here and schedule today!