The case for cyber insurance gets stronger by the day, as cyber incidents grow in cost, cyber attacks become more frequent and cyber policies offer more innovative and effective services. Businesses often aren’t aware of their cyber risk or the role cyber insurance can play in protecting them. That’s our job, so let’s go through it with you.
Rather than jumping straight into granular detail that can feel unrelatable and unconvincing though, let’s consider how you are at risk, the potential consequences of that risk and how you can prevent it.
Let’s stick to the basics and avoid unnecessary jargon shall we!
What cyber security practices do you have in place?
Do you consider data privacy?
Have you been impacted by a cyber attack before?
Did you know 72% of businesses worldwide have been impacted by ransomware in 2023?
Key factors that influence the price of cyber insurance
Cyber insurance provides great value for businesses big and small, but in many circles its cost is a topic of discussion.
It may help to know the three big factors that influence insurance cost:
- Cyber incidents, particularly against SMBs, are the top business risk for the fifth year running.
- The average cost of a cyber claim is significant.
- Today’s cyber policies offer sophisticated technical services that would be too pricey for SMBs to get on their own.
Learn more about why cyber insurance is a great investment for any business, plus a breakdown of cyber incident costs, in this quick read.
Some common misconceptions about cyber insurance
“I already invest in cyber security.”
Cyber insurance provides a different service to cyber security, it’s not a question of either/or. Good policies will support the business’ internal IT team or external managed service provider with an expert incident response and business recovery team. It will also cover financial loss if the worst happens.
“Cyber attacks only affect big businesses.”
While it is attacks on household names that make the news, any business can find itself hit by a cybercriminal. Smaller businesses tend to have less mature cyber security practices in place, so cybercriminals often see them as the more attractive target.
“We don’t collect sensitive data.”
Two of the most common and costly cyber attacks in the market are actually ransomware and funds transfer fraud, which aren’t necessarily aimed at stealing data. The cost to contain threats, repair networks and restore business operations—or to recover stolen funds—are probably your biggest worry. Are they not?
Thankfully, both types of incidents can be covered under a cyber policy.
Use this checklist to find answers for more common objections.
Some further things to consider
Security assessments don’t tell the full story.
Businesses often use third-party risk reports and vulnerability scans to evaluate their cyber risk. While these assessments give a good snapshot of network health at a specific time, IT environments can change any day. This means assessments don’t reveal much around the level of security across a network, potentially presenting a far more positive picture than is the case.
Fully understanding when and how risk reports are beneficial will help understand your risk and purchase the correct coverage.
Good policies offer proactive and reactive services.
Cyber insurance doesn’t just cover financial loss when an incident occurs. A good policy can offer proactive protection to stop attacks from happening in the first place, and reactive support to respond to the incident efficiently and effectively.
Some cyber policies have a global team of cyber experts that work around the clock to detect and alert clients to the cyber threats targeting their business. If they discover a cyber security issue, their team notifies the impacted business and takes steps to remediate the threat before it escalates. Hence can reduce a claims cost.
Very different to traditional insurances where the Risks Management in itself is a very important piece of the Cyber Insurance take out.
The perfect analogy that shows the true value of cyber.
Taking out property insurance in case of a fire is seen as standard practice. Alarms and sprinklers can reduce fire damage, but they can’t remove the possibility of you facing a costly bill and business interruption. It’s the same principle for cyber.
The most advanced cyber security available can still get caught out by a new vulnerability or threat. Without cover, the impacted business won’t receive support in their incident response and recovery, and it’ll bear the financial burden alone.
With today’s cyber policies broadening their cover and protection, and cyber risk escalating at an alarming rate, cyber insurance is set to play a bigger role than ever before. In helping our clients understand their cyber risks- and how cyber insurance is such a game changer – we can help arrange protection for your business.
