The Importance of Cybersecurity Insurance

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Let’s face it, not only has 2021 gone by fast, but it has also been one of the most daunting and challenging times for any IT Security, regardless of location.  A lot of this has been fueled by the surge in Ransomware attacks to targeted industries.  

Ultimately, nobody is immune from it totally and we all are at risk.  The bottom line is that Ransomware attacks can bring your business to a grinding halt, and perhaps even shut you down entirely.

The unfortunate irony of all this is that it can take years to build your business and create a strong brand reputation amongst your customers, but all of that can be wiped away in just a matter of a few hours.  One of the best lines to financially protect yourself in this regard is to procure a solid, Cybersecurity Insurance Policy.

The Key Benefits of Cybersecurity Insurance

Here are some benefits that should grab your attention.

  1. The loss of important data:

This is the lifeblood of any business.  You depend upon this to reach out to your customers daily, and you also use it to try to predict how prospects will react to a new product/service.  But unfortunately, this is also one of the most sought-after targets of the Cyberattacker.  Once they get in successfully, they exfiltrate as much as they can and sell it on the Dark Web.  From here, other Cyberattackers can buy these datasets, and then launch their own threat variants from it.  Additionally, in the event of a data breach, you also must notify your customers as well as other key stakeholders as to what happened.  This can add even more cost.  But the good news is that your Cybersecurity Insurance Policy should be able to compensate you for this after you have filed your claim.  This is deemed to be 1st party coverage, so you should get your money quickly.

2. Incurred downtime:

If you have been impacted by a ransomware attack, you could be experiencing some serious downtime, especially if you are mulling over whether to pay the ransom.  Not being in business can start to take a severe financial toll starting from the first hour.  Obviously, you want to be up and running ASAP, but the good news here is that your Cybersecurity Policy should also be able to include these downtime costs in your payout.  You will have to provide proof to your carrier of the exact amount of downtime that your business has experienced; they simply won’t cut a blank check to you.

3. Extortion

Ransomware attacks simply don’t involve deploying malware onto your devices to lock them up and the files that reside on them.  They have become much more nefarious in nature, which now includes extortion.  For example, the Cyberattacker could threaten your business by making public the Personal Identifiable Information (PII) datasets that you have.  The temptation to pay up the ransom will be strong here, but it is important not to give in.  But if you do, to varying degrees, your policy should be able to include this amount on your payout.  The reason for this is that many insurance carriers have now stopped reimbursing companies if they have indeed made a ransom payment.  In fact, there is now legislation pending that if you do pay up, it could become a federal crime.  But extortion is a different matter because other people will be directly affected by it as well.  So, if you can prove that you have been a true victim of this, and tried all possibilities to avoid paying the Cyber attacker, there is a good chance that you will be covered.

4. Finding out what has happened:

After any security breach, the investigative process will start.  In today’s age, this is not an option.  It is now required.  Depending upon the magnitude of the breach, this could be a long and time-consuming process, especially if you have to hire forensics experts.  This can be costly, but fortunately, this is also considered to be a 1st party coverage, so your carrier should be cooperative with you in getting the full payout for this.  In fact, many of them now require that a forensics examination takes place before any money is given out.

5. The Lawyers:

Another aftermath that is almost unavoidable is the lawsuits.  Whether they come from your customers, employees or third-party suppliers, this facet of a Cyberattack is almost a guarantee.  This is where you will need to hire a good lawyer in order to try settle these cases first before they actually go to court.  This is another expensive proposition, and in fact, legal fees can be just as much or even greater than the costs of the downtime your business has experienced.  But, if you can provide proof that you have gone through all of the proper channels in hiring a lawyer, your insurance carrier could possibly give you the payout for this sooner rather than later.

Why You Should Implement A Cybersecurity Insurance Policy

As you can see, having a rock-solid Cyber Insurance Policy in place is a must these days, especially for those institutions that are involved in the banking and finance sectors.  Although there is no law or regulation that makes it mandatory, the benefits of having one far exceeds the costs.  Also, keep in mind that just because you simply have an Insurance Policy that you will not be covered all the time.

There are other hoops that you have to go through in this regard, and a future article will address this in detail.

If you are needing assistance with implementing a cyber insurance plan, partnering with a trusted managed service provider like Results Technology can help lead you in the right direction. We understand that cybersecurity is a journey, not a destination and there are many components to your business IT and cybersecurity. Reach out to us today to schedule a call with one of our sales experts.