What is Cyber Insurance?
Cyber Insurance is a type of business insurance that can cover a significant variety of electronic communication, technological, and other cyber-related risks that modern companies face.
At its most basic, cyber insurance is intended to cover your business against damages caused by cybersecurity infractions and other cyber-related liabilities. While the mind may first imagine hackers and other external threats as the quintessential agents of cyber malfeasance, internal threats (whether criminal, such as a data breech committed by an employee; or accidental, like a code glitch that brings the network down) can be covered by cyber insurance as well depending on the terms of a given policy.
Cyber insurance in one form or another has been around since at least the 1990’s. Historically associated with cybersecurity – as business operations have become ever more dependent on properly functioning technology - cyber insurance has evolved to cover threats ranging from external, to internal, to accidental, as well as general cyber stability fortification acknowledging the crucial role that properly functioning electronic communications systems and other cyber-related technologies in modern business.
While cybersecurity has emerged as a vital business consideration as the threat of electronic crime and the sophistication of the methods by which it is perpetrated have grown proportionally, cyber insurancehas become an increasingly common defense mechanism that many companies have been including among their means of protection.Because it is relatively novel, however, and because of the significant scope of both the threats and the damage that may result from cyber liabilities, coverage and policy terms that fall under the umbrella term cyber insurance may vary widely.
The first step in determining the type and scope of cyber insurance that best suits your needs is to evaluate the scope of liability exposure as a result of cyber threats that potentially threaten your business:
- Does your business maintain digital records containing the personal information of clients and/or customers?
- Doesyour business maintain digital records containing the banking or credit card information of clients and/or customers?
- Does your business have digitally accessible information that may be considered confidential and/or is otherwise subject to some form of non-disclosure agreement, or similar document?
- Does your business have digitally accessible intellectual property that might be of value to competitors?
- Does your business use any digital platforms (either internal or external) in the operation of your business that, if shut down or otherwise made inoperable, would severely hinder your ability to conduct business?
- Does your business have digitally accessible employee records or personal information that if stolen or exposed could create a liability?
- Does your business communicate any potentially sensitive information across non-secure lines of electronic communication?
- Does your business send or receive data that could critically affect business operations if that data or documentation were to be stolen, altered, or compromised in any way?
For those who answer yes to any of the above questions, then some form of cyber insurance may very likely be a wise decision for you and your business – the question then becomes what scope of coverage is best suited to limiting your risk and exposure in the event of cybercrime.
Some potential areas of policy coverage include data breeches, negligently spreading a virus that impairs another company’s ability to conduct business, denial of service attacks, media/copyright/IP infringement, identity theft liability, ensuing damages, and legal representation in the event of a lawsuit.
Beyond potentially reimbursing financial losses and providing legal services in response to given occurrences covered by the policy, cyber insurance providers often include additional support services that can benefit their policy holders. Some such services may include working directly with injured parties to recover any personal data that may have been exposed in a breech, or providing the funds necessary to hire a crew of contracted IT workers in order to resolve a network-wide outage. When it comes to cyber insurance policies, both the coverage and the remedy options are extensive to say the least.
Because of the ubiquitous nature of technology in the professional environment and because of the wide-ranging number of technologically-related events that could potentially disrupt that workflow to disastrous effect, cyber insurance can seem fairly intimidating at the outset. By the same token, however, that ubiquity and the vast number of potential threats (malicious and otherwise) is exactly what makes cyber insurance such an obvious investment for security, coverage, and specialized help in the unfortunate (though seemingly nearly inevitable) occasion when it is needed.
In addition to the many advantages that come with comprehensive cyber insurance coverage, one of the biggest benefits comes before the policy is even written – when the insurance provider tests your current levels of security to probe for weaknesses and potential liabilities.
Fortunately, the very same technological developments - that further ingrain our digital dependence with the benefit of seemingly endless efficiency improvements at the expense of increased exposure to liability and bad actors - also provide solutions. In this case, publicly available databases have been compiled and mined in order to simplify your search for a cyber insurance professional that can help develop a cyber insurance policy and plan that is perfectly tailored to the needs of you and your business.
Whether you’re looking for a cyber insurance broker or just an advisor or consultant to help you better understand your own cyber-related needs before entering the market, you can search for cyber insurance professionals operating in your area and sort by ratings, specialties, and several other criteria to help refine the coverage factors that are most important to you.