Cybersecurity Insurance vs Cyber liability Insurance
What It Covers and Who Needs It
Warning: Cyber insurance does not prevent any cyber-attacks from occurring, leaving your business infrastructure vulnerable. Learn how to find trusted cyber defense vendors here
In this article you will learn:
- Cybersecurity insurance and cyber liability insurance
- Statistics that demonstrate the growing need for businesses to have cyber insurance
- Why company need cybersecurity insurance
- How to choose cyber insurance provider and what is the difference
- How to Choose Cyber Insurance
- How to qualify for cybersecurity insurance
- How to lower my cybersecurity insurance premiums
Cybersecurity insurance, also known as cyber insurance or data breach insurance, is designed to help protect a business from the financial losses that can occur as a result of a cyber attack. This can include things like the cost of restoring data, providing credit monitoring services to affected customers, and paying regulatory fines or legal settlements. Cybersecurity insurance can also provide coverage for things like business interruption and reputational harm.
Cyber liability insurance, on the other hand, is designed to provide coverage for third-party claims that result from a cyber incident. This can include things like customer lawsuits, claims from business partners, and regulatory action. Cyber liability insurance can also provide coverage for things like intellectual property infringement and media liability.
In summary, Cybersecurity insurance protects from internal cost of a cyber attack, and Cyber liability insurance protect from external cost (liabilities) of a cyber attack, such as lawsuits and regulatory fines.
It is important to note that in some cases, businesses may need both types of insurance to provide comprehensive coverage for cyber risks.
- Cyber attacks are the most common: 70% have experienced a cyber attack, followed by identity theft at 69%, cyberbullying at 64%, and cyber extortion at 69%.
- Did you know that nearly two in three midsize organizations have suffered a ransomware attack in the past 18 months? Even more concerning is that 20% of them spent at least $250,000 to recover from it.
- Last year organizations experienced the highest average cost of a data breach in 17 years at $4.24 million, rising from $3.86 million the previous year.
There are several statistics that demonstrate the growing need for businesses to have cyber insurance.
According to a report by the Ponemon Institute, the average cost of a data breach for a business is $3.86 million, and the average time to contain a breach is 280 days.
Another report by Accenture estimates that cybercrime will cost businesses $11.5 trillion by 2025.
A survey by Hiscox found that 43% of cyber attacks target small businesses, and 61% of those attacks result in business interruption.
The National Cyber Security Alliance reports that 60% of small businesses that experience a cyber attack are forced to close within six months.
These statistics highlight the financial impact that a cyber attack can have on a business, both in terms of immediate costs and long-term consequences. Cyber insurance can help mitigate these costs and provide financial protection for businesses in the event of a cyber incident.
Additionally, it’s also important to note that many companies, especially in some fields, have regulatory compliance requirements such as HIPAA for healthcare, which legally oblige them to have some form of cyber security protection in place. So not having cyber insurance may actually put them in violation of these laws.
It’s important to understand that these are just a few examples and the specific risks, industry, and company size vary and would require a detailed analysis and assessment to have a better idea of the specific risk and coverage needs.
Cybersecurity is taking preventative measures to secure your organization and tends to be cheaper than cyber insurance. Learn how to find trusted cyber defense provider here
Why company need cybersecurity insurance
Cybersecurity insurance can provide companies with financial protection against the costs associated with cybersecurity breaches and data breaches. These costs can include expenses such as legal fees, credit monitoring for affected customers, and public relations efforts to repair damage to a company’s reputation.
In today’s digital age, companies of all sizes are at risk of cybersecurity threats such as hacking, ransomware attacks, and data breaches. Even if a company has strong cybersecurity measures in place, it is still possible for an attack to occur. Cybersecurity insurance can help a company manage the financial impact of an attack and recover more quickly.
In addition to providing financial protection, cybersecurity insurance can also help a company demonstrate to customers and clients that it takes cybersecurity seriously and is committed to protecting sensitive data. This can help build trust and strengthen relationships with customers and clients.
Overall, cybersecurity insurance can be an important component of a company’s risk management strategy, helping to mitigate the potential financial impact of a cybersecurity breach or data breach.
What Cybersecurity Insurance Covers
Cybersecurity insurance can provide coverage for a wide range of costs and expenses associated with cybersecurity breaches and data breaches.
Some specific types of coverage that may be included in a cybersecurity insurance policy include:
Legal fees: Coverage for legal fees associated with responding to a cybersecurity breach or data breach, including costs for investigation and defense against legal claims.
Notification and credit monitoring: Coverage for the costs of notification and credit monitoring for affected individuals in the event of a data breach.
Public relations: Coverage for public relations efforts to repair damage to a company’s reputation in the aftermath of a cybersecurity breach or data breach.
Business interruption: Coverage for lost income and expenses resulting from a disruption of business operations due to a cybersecurity breach or data breach.
Data restoration: Coverage for the costs of restoring lost or damaged data resulting from a cybersecurity breach or data breach.
Cyber extortion: Coverage for the costs of responding to and paying cyber extortion demands, such as ransomware attacks.
This is not an exhaustive list, and coverage can vary depending on the specific policy. It’s important for companies to carefully review their cybersecurity insurance coverage to understand what is and is not included.
How to choose cyber insurance provider and what is the difference
When choosing a cyber insurance provider, it’s important to consider a few key factors. First, it’s important to understand the coverage that is offered by the provider, including what types of incidents are covered and what the limits of coverage are. It’s also important to consider the reputation of the provider and the financial stability of the company. Additionally, you may want to look for a provider that offers additional services, such as risk management consulting or incident response support.
When it comes to differences between cyber insurance providers, here are a few things that can vary:
- Coverage Types: Different providers may offer different types of coverage, such as data breach response, network interruption, or cyber extortion coverage.
- Limits of Coverage: Providers may have different limits on the amount they will pay out for a covered incident.
- Deductibles: Deductible is an amount that policyholder pays before the insurance coverage starts. It can vary between providers.
- Provider Reputation: Different providers may have different levels of experience and reputation when it comes to providing cyber insurance coverage.
- Additional Services: Some providers may offer additional services such as risk management consulting or incident response support, which can be helpful in case of a cyber incident.
It’s important to shop around and compare different providers to find the one that best meets your needs. It can be also helpful to get advice from experts on cyber insurance before making any final decision.
How to Choose Cyber Insurance
When choosing cyber insurance, there are a few key factors to consider:
- Coverage: Make sure that the policy covers the types of risks that are most relevant to your business, such as data breaches, network failures, and cyber extortion.
- Limits: Determine how much coverage you need, taking into account the potential cost of a cyber incident, such as the cost of notification, credit monitoring, and public relations, as well as any regulatory fines that may be imposed.
- Exclusions: Review the policy’s exclusions to ensure that you understand what types of losses will not be covered.
- Price: Compare the cost of different policies to ensure that you are getting a good value for the coverage provided.
- Reputation: Research the insurance company’s reputation and financial strength, as well as their experience with and understanding of the cyber insurance market.
- Claims: Look for policies that provide a clear and efficient claims process, so that you will be able to quickly and easily recover in the event of a loss.
- Review & Evaluate: review and evaluate your insurance policies regularly and adjust coverage and limits as needed, especially given how fast the cyber security field is advancing.
Also, it’s recommend to take advises from a professional insurance broker and a cyber security expert.
Q. How to start with cyber insurance? One way to start with cyber insurance is to schedule a consultation with Rusty Goodwin, who I met at a TMT conference. He specializes in helping MSP’s with cyber insurance.
How to qualify for cybersecurity insurance?
Cyber insurance coverage requirements.
In order to determine your premium, coverage limits and whether you even qualify for cyber insurance in the first place, most providers will carry out a cyber insurance risk assessment as part of their underwriting process. Depending on the size of your company, this process can range from a questionnaire to a detailed analysis carried out over multiple weeks by a cyber security firm. Regular check-ups and reassessments are also possible. To keep risks at an acceptable level, policyholders are required to meet basic IT security standards in order to qualify for cyber insurance. At a minimum, a company interested in buying cyber insurance must have the following safety measures in place:
- Use multi-factor (MFA) authentication wherever it is available such as Cisco Duo
This is one of the simplest, yet most effective, actions that any organization can take to protect themselves. If you’re not enabling it, you’re essentially leaving your doors unlocked. Multi-factor authentication from Cisco’s Duo protects your applications by using a second source of validation, like a phone or token, to verify user identity before granting access.
- Conduct an annual comprehensive network risk assessment
This will help identify your cyber risk, just like you would identify crumbling foundation or fire hazards. But identifying risks doesn’t mean much without taking the next step—so be sure your risk assessment is followed by a detailed plan of action.
- Require security awareness training for all staff
It’s still true that with all the security risks out there, your weakest link is still your people. Teaching them the basics, and also building a culture of cybersecurity within your organization, will help to greatly reduce risk.
- All PCs must be equipped with antivirus software and it must be kept up to date
- User access rights and permissions must follow a LA Networks will supplement your IT team and be constantly monitored for any changes or breeches in access privileges.
LA Networks will work with you to build a comprehensive approach to only granting the minimum required access rights to each of your users, and then alerting you to any attempts to circumvent these guardrails.
- and more… Contact LA Networks to comply with cyber insurance guidance
Valuable Cyber Defense Resources:
- How to Choose a Reliable Cybersecurity Company
- How to Measure and Justify Your Cybersecurity Investment and Return on Investment (ROI)
- Marketing for Cybersecurity Company
- Advertising and marketing services for businesses in any industry
- Cybersecurity marketing strategy for healthcare industry
- Cybersecurity Conferences, in-person events, virtual summits, webinars and workshops
- Whiteboard and Cartoon Animation Production, Videos Marketing for Any Industry
- Cybersecurity News, Marketing Blog and Events
- How to Effectively Follow Up with Prospects After a Webinar
- How to Measure and Justify Your Cybersecurity Investment
- How to Choose Cyber Insurance