The Importance of Cyber Insurance

Cyber insurance is becoming a necessity as system hackers become more intelligent and cybersecurity is a major concern for organizations of all types and sizes. Fortunately, there are a variety of cyber insurance plans that can protect you from the impact of cyber-attacks, which are becoming more inevitable.

There are a variety of reasons to invest in a trusted cyber insurance plan. For one, it will cover the hefty financial costs that come with a cyberattack. Secondly, it also provides you with immediate assistance in the event of an attack from the insurance team, including IT forensics specialists, privacy lawyers, and PR experts. But above all, it will give your organization peace of mind to know that you will be taken care of if all your defensive protection fails.

The typical cyber insurance policy covers the following:

• Forensic analysis to identify the attack source and ransom demands
• Specialists to handle ransom negotiations
• The costs to regain access or restore your data from backups or other sources
• Legal costs
• Public relations services
• Notification of clients and/or regulatory bodies,
• Credit monitoring services for affected individuals

In the event of an attack, the insurance provider will appoint a consultant to advise on the handling and negotiation of the ransom demand, identify the lowest cost way to restore the data (ransom payment, backups etc.), and bring in the necessary experts to deal with the issue.

The cost of cyber insurance varies depending on a variety of factors. Some of these include demographics, potential exposure, level of cybersecurity, history, and insurance policy terms. However, the average cost of recovering data from a ransomware attack is rising considerably. In 2020, the typical cost after an attack was $1.85 million, which was more than double the average cost in 2019.

Hackers are building more automation and doing more hands-on attacks to increase their chances of delivering a successful offense. This means that recovery is more difficult and often requires that additional protections be put in place. That’s why cybersecurity and cyber insurance go hand in hand.

There are several considerations your organization should make when thinking about signing up for a policy. It is critical that you assess the capabilities of your IT infrastructure and security processes to ensure you have the tools to prevent and minimize damages of a cyber-attack. The insurance agencies will want to assess these capabilities prior to quoting a policy. Flagship Networks offers cyber security audits based on our Flagship Security Framework to help you assess your capabilities.

The cyber insurance market is becoming tougher as premiums go up and the need for coverage becomes more widespread. Having the best defensive protections in place will go a long way should an attack occur. It will minimize the risk of having to make a claim and gives a better chance that the insurance company will pay out when the time comes. Such cyber defenses are necessary during these times and are the most effective option for dealing with cyber-attacks.

For more information on cyber insurance, download the Sophos Guide to Cyber Insurance.

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