Cyber insurance is a game changer for business owners that use the internet heavily.
In today’s world, things could go wrong in a jiffy for internet users.
Malicious people now use the knowledge of the internet to cause mayhem and spoil things for genuine businesses.
Internet crime or attack could cause a great setback, and businesses that run on data through the internet are always at risk of loss, theft, errors, or irredeemable damage.
For this purpose, business owners at the receiving end of cyber attacks invest in cyber insurance to protect themselves and their businesses.
Now, as an internet user, looking for how to protect what you cherish. This is what you need to know about cyber insurance.
What is cyber insurance?
Cyber insurance is a special kind of insurance policy that goes a step further to protect internet-based businesses from risks associated with information technology and the internet.
Businesses and companies purchase this protection to cover the financial burden that may occur through a cyber attack.
It may not be sold or issued by traditional liability insurance companies because this type of coverage is relatively new and different.
Companies pay a certain amount monthly, quarterly, or annually to cyber insurance companies for internet-based protection.
What makes cyber insurance so important?
The need to keep privacy with data and other work-related activities has driven companies to seek extra protection.
For instance, companies that work with customers’ information and classified data stand a great risk should their data bank, and information system be hacked.
Also, businesses have gone extinct or shut down because they had a breach in internet security and got all their classified information exposed or corrupted.
Not just that, these attacks may prevent customers from fully utilizing company-provided services. This may cause a loss of huge amount of money to the company involved.
Furthermore, internet theft and crime are becoming advanced and the order of the day too. And daily, companies and even individuals become victims of cybercrime.
So, cyber security has become the only way companies try to protect themselves and ensure continuous business operations.
Who needs cyber protection?
Protecting your internet activities with the necessary tools available to you is advised.
Also, businesses that rely on the internet to serve their customers, use the internet to store data that can become irreversibly lost should there be a breach.
More so, financial institutions like banks, devices or app developers need cyber security. Over time, they have been the target of hackers in a bid to transfer funds in the bank or corrupt devices.
Does cyber insurance cover ransomware?
Ransomware attacks are still rampant in cyberspace. It is because ransomware attacks can now affect not only windows but even Mac, mobiles, and other devices.
So, cybercriminals attack organizations through ransomware just to extort huge funds from these organizations.
If you wonder what is ransomware, it is a form of cyber attack. Malware is sent to the system and either locks out the victim by encrypting their files or threatens to expose the confidential data on the system for ransom. This threat may be carried out if the victims do not cooperate by paying the ransom.
Say the victim refuses to pay the ransom, the cybercriminals lock the files completely, and any attempt by the victim destroys the files permanently.
Ransom payments to criminals are always through cryptocurrency. This route makes the funds untraceable due to the nature of the digital currency. It makes it almost impossible to catch the criminals, and prosecution may not be possible at this point.
That said, cyber insurance covers ransomware attacks by paying for ransomware and also, providing avenues for data recovery and possible investigation.
Types of cyber insurance
There are types of this insurance coverage that companies make use of. It does not matter if you believe that you are not at risk. Cyber crimes happen out of the blue, and suddenly, you become a victim.
Therefore, as a business owner that uses the internet to carry out your business, you will need one of these cyber insurance covers.
The coverage protects from damages from a data breach.
It is a better coverage option for companies that use and collects data a lot to provide services for their customers.
For example, financial institutions like payment platforms collect their customers’ data, phone numbers, store account details, and other customer information.
This type of company runs the risk of a data breach. So, cyber liability protects the company from threats of this kind but not from the immediate cost.
Crises management expense insurance
This type of insurance is also known as cyber security. And it covers the cost of a cyber threat’s immediate response.
Also, this coverage protects a company from a data breach that affects the company and causes first-party damage.
Errors and omission insurance (E&O)
This company liability coverage protects the company from negligence claims from a customer.
It serves businesses that offer services to their customers through the internet and tech.
So, in a situation where a customer lays claims, and files a lawsuit against the company on the grounds of error. The insurance steps in and pays for damages incurred from the lawsuit.
The downside of cyber insurance
Though, this type of insurance has been and is still very beneficial to businesses.
The major downside to it is the cost. It is not yet accessible to all business owners, especially start-ups.
Now, this is due to its expensive cost. Most businesses can not afford to keep paying the exuberant cost of their premiums or maintenance.
More so, some cyber criminals still go scot-free due to their untraceable methods. This makes them bolder in their criminality and advances their hacking techniques.
In summary, as a company or business owner, while putting every other thing in place for the smooth running of your business, you have to think about security.
It is nice to buy the right insurance coverage for your workers. Also, make plans for cyber insurance by speaking with the right cyber insurance providers.