What do you think of when you hear about commercial insurance? Your first thought may be liability insurance or coverage for commercial vehicles, properties, and professional services.
But a new type of insurance has emerged over the past few years, and it’s taking the insurance industry by storm as it becomes more and more necessary by the day.
Cyber insurance has risen in response to growing concerns over data breaches and other cybersecurity incidents amongst businesses of all sizes and industries. The COVID-19 pandemic and the subsequent rise of remote work solutions has only exacerbated the problem, with cybercrime rising 600% in recent months.
Proper cybersecurity policies and tools in place go a long way to protecting yourself, your business relationships, and your customers.
But the truth is that nothing can completely eliminate your risk factor, and with data breaches costing organizations $3.86 million on average per breach, you can never be too safe. So what’s the answer?
What Is Cyber Insurance?
Cybersecurity risk management is all about taking a proactive approach to reducing your own risk of an incident while still preparing for the worst if a breach does happen. Insurance is designed to help you recover from a cyberattack and recover from the costs of:
- Ransomware
- DDoS attacks
- Data breaches
- Lost revenue
- Down time
- Reputational damage
- …and others.
Insurance has become an accepted part of any cyber risk management strategy, and obtaining it requires an awareness of your own security posture first. An insurance company wants to know that you are taking enough precautions yourself, hence the use of periodic risk assessments during negotiations and renewals.
In an indirect sense, the adoption of cyber insurance also leads to better practices for the client business regarding cybersecurity. You will become more aware of your defense gaps and will take action to reduce your vulnerabilities to get better insurance premiums. Everyone wins!
Don’t fall behind like other organizations without insurance at all. In a study by RiskandInsurance.com, it was found that only 5% of manufacturing companies in the US had a policy in place despite the ever-growing threat of online data theft. When you consider that manufacturing faces the constant threat of having its equipment shutdown by cyber criminals—directly impacting that industry’s ability to generate revenue—it’s clear why cyber insurance is crucial today.
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What Do You Need to Cover?
Cyber insurance is relatively new when compared to other forms of commercial insurance. However, it’s no less important given that traditional commercial policies often don’t have coverage for technology infrastructure, data privacy, or other necessary fields. If you’re looking for a provider today, expect protection against:
- Network security: Such as malware attacks, hacking, and data theft.
- Data loss: Retrieving data from destroyed sources might be on offer, as well as restoration from system failure.
- Incident response: Forensic investigations can play a role in damage control and analyzing the extent of the breach.
- Recovery: Insurance can help you patch up workflow interruptions and get you back up and running as quickly as possible.
- Damage control: Insurance can reduce the damage to your reputation as a business from cyberattacks.
- Loss of revenue: Protection for any lost revenue you may experience during a data breach.
- Brand damage: Intangible costs related to brand damage you may suffer due to a data breach.
It should be clear why cyber insurance is in such high demand, especially with many companies making cyber insurance a requirement for any vendors wishing to work with them.
What About Insurance For Cybersecurity Regulation?
The insurance company has a common interest with its customers to lower risk, prevent threats and increase safety. In other words, both of you mutually benefit from fewer incidents, which means insurance companies can incentivize you to actively lower your risk level.
What about regulatory compliance? Companies that proactively manage their cyber risk will have an easier time meeting regulatory compliance since they are more likely to be following industry best practices when it comes to compliance.
Regardless, all companies, even the most prepared, are susceptible to cyber attacks. Cyber insurance provides a financial safety net that’s designed to save them from going out of business when a cyber incident does occur.
Reduce Cyber Insurance Risk With A Powerful Risk Management Platform
Not all cyber insurance policies are created equally. Whether you’re an individual company looking for a policy or an insurance company looking to mitigate risk through policies you create, an automated risk management platform is a must-have today.
Centraleyes provides a powerful platform that companies can use to gain a real-time snapshot into governance, risk, and compliance. For insurance companies, this means automating risk assessment for cyber insurance policies, gathering more industry-specific data, and reducing your exposure to risk.
Interested in learning more about how Centraleyes can automate your entire risk management practice in less than 24 hours? See a demo to get started.
Start Getting Value With
Centraleyes for Free
See for yourself how the Centraleyes platform exceeds anything an old GRC
system does and eliminates the need for manual processes and spreadsheets
to give you immediate value and run a full risk assessment in less than 30 days
