Cybersecurity insurance is an important part of any business’s risk management strategy. We will talk more about creating a Risk Management Program a bit later in a future blog, but the need for insurance continues to increase. Cyber threats are becoming more sophisticated and widespread, and with the potential for serious financial losses from even a single attack, having a strong cyber insurance policy in place can help to mitigate the risks.
What has become alarming to me is how expensive cybersecurity insurance has become and how this might deter folks from purchasing this much needed protection. In a nutshell the protection that a well written cyber-policy could provide may impact your business’ very existence. Here are the key loss categories that a policy could address:
- Money lost due to fraudulent instruction by a third party (i.e., phishing)
- Lost business income and data recovery costs due to an extortion threat (i.e., a ransomware demand) or breach.
- The costs to comply with regulatory requirements, including defense against lawsuits and regulatory fines.
- Expert breach response services if an attack occurs.
Another key benefit of cybersecurity insurance is that it helps organizations plan for the future. By investing in a suitable policy now, they can be prepared to cover any potential losses that may occur in the future, making it easier and more affordable to deal with any incidents quickly and effectively.
Cyber insurance providers also can give an organization a 3rd party view of their current approach to data security and whether they feel that they are truly and insurable risk. This process can uncover a great deal that the organization should be aware of allowing them to make informed decisions using data that is created by people who understand risk.
Finally, cyber insurance gives organizations access to important resources during an incident response. Most policies include access to experts and consultants like General Informatics who are knowledgeable about cybersecurity and experienced in dealing with such events. This means businesses can get expert advice quickly, helping them to respond in the most effective way and minimize the impact of an attack. We are contacted by a number of insurance brokers who ask us to do assessments on their behalf to objectively look at an organizations environment and whether it is properly fortified.
Overall, cyber insurance is an important part of any business’s risk management strategy. By having the right policy in place, organizations can ensure they are financially protected from attacks and have access to the resources needed for a successful response. Ultimately, this can help reduce the cost and disruption caused by a data breach or other cybersecurity incident.
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