cyber insurance

What is Cyber insurance?

It is a type of insurance coverage designed to protect businesses and individuals from financial losses and liabilities resulting from cyber-related incidents. These incidents can include data breaches, cyberattacks, network security failures, and other digital threats.  Cyber insurance is also known as cyber liability insurance or cyber risk insurance.

Here are a few startling statistics

      • 58% Percent of cyber attacks are targeting small businesses.

      • 4-in-5 Number of SMBs reporting attacks that evaded their antivirus and intrusion detection software

      • $160,000 Average loss from a ransomware attack for a small business

An examples of what can occur:

•  Data breach could occur when hackers gain unauthorized access to a company's database, compromising sensitive information such as customer names, addresses, payment details and employees information (social security numbers).
• Cyber extortion could be a scenario where hackers gain control of a company's website and threaten to shut it down unless a ransom is paid. They may also threaten to release sensitive customer data unless a large sum of money is transferred to them.
•  Malware attack is when a user unknowingly downloads a malicious email attachment containing ransomware. Once opened, the ransomware encrypts the user's files, rendering them inaccessible, and demands payment in exchange for decryption keys. 
• Phishing attack is when a user receives an email that appears to be from their bank, requesting them to click on a link to verify their account details due to a security breach. The link leads to a fake website designed to steal the user's login credentials, allowing the attacker to access their bank account. 

Key Features of Cyber Insurance

1. Data Breach Coverage: Cyber insurance typically provides coverage for the costs associated with responding to a data breach. This can include expenses related to notifying affected individuals, providing credit monitoring services, and managing public relations to mitigate reputational damage.

2. Cyber Extortion Protection: Many cyber insurance policies cover expenses related to cyber extortion, such as ransomware attacks. This can include reimbursement for ransom payments as well as expenses associated with negotiating with cybercriminals. 

3. Business Interruption Coverage: Cyber insurance may also provide coverage for losses resulting from business interruption caused by a cyber incident. This can include reimbursement for lost income, extra expenses incurred to restore operations, and other financial losses.

4. Liability Protection: Cyber insurance often includes coverage for legal defense costs and damages arising from third-party claims related to a cyber incident. This can include lawsuits alleging negligence in securing sensitive data or failing to protect against cyber threats.

5. Regulatory Compliance: Many cyber insurance policies offer coverage for fines and penalties imposed by regulatory authorities for non-compliance with data protection regulations. This can include fines levied under laws such as the General Data Protection Regulation (GDPR) or the Health Insurance Portability and Accountability Act (HIPAA).

6. Risk Management Services: Some cyber insurance providers offer proactive risk management services to help businesses identify, assess, and mitigate cyber risks. This can include cybersecurity training for employees, vulnerability assessments, and incident response planning.

Overall, Cyber Insurance serves as a critical financial safety net for businesses and individuals in today's digital age, helping them recover quickly and minimize the financial impact of cyber incidents.