Introduction
Many companies are already engaged in some kind of cyber-threat management preparedness, whether it’s engaging with stronger defense mechanisms, or shoring up fast and efficient responses when breaches happen.
Cybersecurity practices like risk assessments and penetration tests can prevent breaches from occurring in the first place, but cyber-threats are evolving nearly as fast as the technology coming out to stop them. Thus there is always a likelihood of a hacker breaching your company’s network, and then it’s a matter of how to catch them and repair any damages that may have been done during the attack. That’s where cyber liability insurance comes in.
What Is Cyber Liability Insurance?
When you get into a car accident, what’s the first thing that you do? Exchanging insurance information protects you from incurring even bigger bills than you otherwise would have to deal with, from mechanical repairs to potential medical expenses and even litigation fees. Insurance helps cover some or even all of these expenses when something actually goes wrong.
Cyber insurance works similarly. Did you know that cyberattacks cost, on average, over $1M? After an attack, you may have to pay for…
- covering clients for any information that may have been compromised in the attack
- legal fees, for representation and damages
- data recovery
- protection upgrades and de-risking clients
- credit checks
- fines incurred
Cyber liability insurance can help relieve some of the burden and even prevent your business from closing as a result of an attack. As the world becomes increasingly digitized, we have to start protecting our digital assets the same way we think about our homes, car and healthcare.
Security and Liability Combined
Fortunately, the same innovative technology that cybercriminals are weaponizing (artificial intelligence, automation, digitization, etc.) also allow security experts to make advancements for your protection. Risk mitigation is more accessible and affordable to all sized businesses thanks to evolving tech solutions, which prevents a lot of the damage associated with breaches from ever taking place. Quickly locating and purging trespassers to the network minimizes how much data they can find, steal or sell – and that makes all the difference.
That’s when cyber liability insurance comes in. Once the security team has taken care of the threat actor themself, there is still data to recover and vulnerabilities to patch. While they get working on improving your cybersecurity so the same attack doesn’t succeed again, liability insurance is there to fund the upgrades, recoup lost or corrupted files, and handle all other potential fallout from the attack.
It takes a village, and a fortress, to fight back against cyberattacks. Preventative cybersecurity goes hand in hand with reactive cyber liability insurance, and together they protect your company from all sides of a breach.
Conclusion
In 2021, attempted cyberattacks increased an estimated 50% every week. Without proper preparation, your company could become part of this dark statistic and suffer damages that can severely set you back, if not forcing the business to close down completely. A strong cybersecurity posture alongside the safety net of liability insurance is the most effective way to get back to your full potential much faster after a breach.
With cyberattacks becoming more advanced every day, taking the time to research and find a cyber liability insurance policy that best suits your business and its particular needs is the most efficient way to recover lost funds and trust after an attack.. That, combined with cybersecurity software and a strong procedure for how to react in an emergency, can work together to save your company a lot of headache in the long run. You never know when a cyberattack will happen; it pays to be prepared.
References
- https://www.travasecurity.com/resources/what-your-cyber-insurance-policy-does-and-doesnt-cover
- https://dynasis.com/2019/03/price-security-how-much-cybersecurity-attack-actually-cost/
- https://www.govinfo.gov/content/pkg/CHRG-114hhrg22625/html/CHRG-114hhrg22625.htm
- https://www.forbes.com/sites/chuckbrooks/2022/01/21/cybersecurity-in-2022–a-fresh-look-at-some-very-alarming-stats/?sh=78fcbf2b6b61
