It’s almost impossible not to be connected to the internet. There is a need for individuals and businesses to be online, whether to automate processes, store or access data, or even reach out to customers. Because we rely on the internet, we are all potential targets for cyberattackers.
While organizations have devised various methods to combat cyberattacks, there is an emerging industry whose efforts aim to reduce the impact of cyberattacks should they occur. This is the cyber insurance industry.
What Is Cyber Insurance?
Alternatively called cyber risk or cyber liability insurance, cyber insurance protects businesses from the consequences of cyberattacks and hacking threats. While businesses are responsible for their cyber security, the right cyber insurance can help mitigate the effects of any cyberattack, helping to keep your business afloat.
These are some of the most common cyberattacks and the ones you are most likely to fall victim to:
- Malware: A type of malicious software that can infiltrate your systems through phishing scams and exploiting software vulnerabilities. Once installed, the attacker can spy on your activities online and steal your personal information.
- Ransomware: This type of malware infects your computer and encrypts data. In exchange for the data’s return, the attacker will demand a ransom payment. As a precaution, you should create a data recovery plan and keep at least one data backup.
- DDoS Attacks: Distributed Denial of Service happens when there is an attempt to disrupt the normal network traffic or server traffic. This is typically accomplished by flooding the target’s infrastructure with internet traffic.
Of all these attacks, ransomware is the most common, and it can be potentially disastrous as criminals could demand millions as ransom. Cyber insurance was created for such situations so companies do not have to pay ransomware settlements.
Why Should You Invest In Cyber Insurance?
Having cyber insurance creates a safeguard for your business that helps you mitigate the effects of the various types of cyberattacks that currently exist if you fall victim. It also:
1. Saves You Money
Investing in cyber insurance is cheaper, especially when compared to the costs incurred after a security breach on your business. A good example of such a scenario is hackers breaking into Sony’s PlayStation network in 2011, exposing personally identifiable information (PII) from 77 million PlayStation user accounts. Sony incurred more than $171 million in costs due to the breach. A cyber insurance policy could have covered some of this cost, but Sony did not have one in place.
2. Builds Trust With Customers
When your customers know that their information is secured and there is coverage in place in case your systems are attacked, they would know that you take their information security seriously and would trust you to safeguard their information.
3. Helps With Data Recovery
In situations where data is stolen from you by cybercriminals, cyber insurance companies are saddled with the responsibility of recovering it. Some even cover the investigation costs, as well as the costs for restoring the computer systems, reputation management and extortion payments (in the case of ransomware attacks).
Securing Your Online Activities With Cyber Insurance
The cyber insurance industry is poised to grow in leaps and bounds as more businesses realize its importance. An IBM study shows a data breach costs over $4 million; not a lot of businesses can afford that, and even the ones that do would rather not shoulder the responsibility. Protect your business, get that cyber insurance.
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