We’ve been discussing cybercrime from quite some while, and rightly so. With the increasing number of hacks and online criminal activities, it just makes sense to stay vigilant. But how to protect yourself from attacks that are just waiting for you to click or tap on an infected link?
Insuring yourself against potential future losses is a wise move. If you can’t prevent it, the least you can do is to minimize your damages. And a cyber insurance seems like a good deal. But before you get a cyber insurance, ask these questions:
1. What Constitutes a Cyber Risk?
Any threat emerging from the usage of information and communication technology is called cyber risk. Cyber risk management means managing the risks arising from virtual reality and electronic communication networks.
The process works in 3 stages- risk avoidance, risk mitigation, and risk transfer or self-insurance. The first stage is risk avoidance which deals with finding the vulnerabilities and controlling the risk. Risk levels are estimated and they are prevented from occurring. You can measure your company’s cyber risk score through unique analysis on security-related categories.
2. Why Do I Need Cybersecurity Insurance?
For an individual or a company, the cyber risks are very damaging. High-net-worth individuals opt for an extensive policy to protect themselves from cyber threats. But even for unsuspecting individuals and salaried employees, a cyber attack can be very stressful. Online threats include breach of your passwords, bank transaction details, or identity theft. This will be a devastating blow to individuals and their families. Not to mention the financial upheaval they will have to go through.
If there are repeated breaches in the same company, they have to endure financial losses, reputational damage, or business interruption. There is a need for proactively strategizing a risk management and protection plan. Cyber insurance mitigates and transfers the risk after the confidentiality of your data is compromised and your services have seen a potential loss.
3. What exactly is cyber insurance?
Just as technology evolves, the capabilities of hackers also grow at a fast and consistent pace. Though the subject seems complicated, it is better to first acquaint yourself with their methods to proactively prevent online risks. When it becomes overwhelming, you can opt for a cybersecurity insurance.
Whenever developers release new software, hackers hit with malware sooner or later. Antivirus software and security mitigation techniques help keep the attackers from finding the vulnerabilities in the system. Managing critical conditions and risk transfer are top priorities for security service providers.
They provide comprehensive solutions to secure your business from cyber risks. They especially deal with crisis management, ransomware extortion, data destruction, and the eventual financial damages due to business interruption.
The Cyber Insurance Market
The cyber insurance market is a new market which is a combination of personal insurance along with insurance for damages done by cybercrimes. Accordingly, the coverage of cyber insurance is varied. It depends on the company size, customer base, web presence, and the database type.
For individuals, coverage differs from that of businesses. The onus is on reducing the financial burden of online attacks. Identity thefts using your medical information (health fraud) or misuse of bank credit card details can be covered under cyber insurance. Your smart home devices may be under attack after a security breach. Cyber insurance covers the damage to your electronic equipment. Insurance covers the cost of ransomware extortion demands and costs of engaging a professional for recovery of lost data or files.
4. Is Getting a Cyber Insurance a Costly Affair?
Prices vary according to the services insurance policy covers. A specialist can charge for the data recovery services they provide, which depend on the device and the intensity of the loss. Their hourly rates and the actual data recovery could burn a hole through your pockets. It is always best to go for a policy that offers this coverage. But how to select from the coverage plans offered, when you know that there are several online threats out there?
This is a predicament even for insurance underwriters. They can only go by the risks they have seen in the past and predict the future. But in the ever-changing cyber world, every potential risk known seems one of a kind.
Cyber insurance policies start at around a minimum of $30 per year, which is the cheapest in the market. There are other policies which go higher than $500 per year, but it is ultimately down to what comprehensive coverage they offer. For instance, cyberbullying policy covers psychiatric expenses for a year, relocation costs, cyber forensic investigation costs, and individual’s 60-day salary in case of loss of a job.
5. How is cyber insurance perceived?
Governments around the world have started paying attention to the potential damage cyber threats can cause to global safety. Still, there is room for improvement. Governments can prevent cyber risks by increasing the funding for the researches. They can collaborate with one another to reduce the losses of online risks and to support the fight against cybercrime. A special legal framework must be set up to impose more severe punishments and minimize the risks.
- One of the main criticisms cyber insurance has to deal with is that the service providers can reject a claim owing to errors in computer programming. So, the responsibility lies with the victims to make sure that there are no vulnerabilities in the system.
- Many critics opine that policies may make the hackers or ransomware attackers even more motivated. This is because they see that a third party picks up the final bill for the damages. Therefore, they can raise the premium.
- The other factor is that individuals themselves might become lax and reckless in safeguarding their interests. They might turn a blind eye towards safety measures knowing that they are in safe hands after taking a cyber insurance policy.
So, Should You Get Cyber Insurance or Not?
In conclusion, the damage in the aftermath of a cyber attack is much larger than the effort you can put in to prevent it. Make your network secure by constantly updating your system and software, using strong passwords or two-step authentication wherever possible. You can also purchase a VPN to connect to the internet. Stay safe wherever you can.