What Is Cyber Liability Insurance... and Do I Really Need It? - Compex IT

What Is Cyber Liability Insurance… and Do I Really Need It?

During March, email scams related to COVID-19 increased by a staggering 667%.

If there’s one statistic which reveals how callous cyber criminals are, it’s that one. They’ll use any excuse to get into the heart of your systems, processes, and data. More importantly – they really do know how to kick you when you’re at your most vulnerable.

But cybercrime doesn’t simply rear its head during times of national or international crisis. It’s an ever-present threat which every business needs to fight against constantly.

However, things do go wrong, and that’s why cyber liability insurance exists.

Let’s consider whether it’s right for your business.

 

What is cyber liability insurance?

Cyber liability insurance is a form of cover which is designed to protect businesses from internet-based risks.

More specifically, this relates to the network infrastructure you rely on to run your business, and the activities which take place within that network – be it in-house or remote.

This insurance is designed to be there if you experience a data breach or some other form of digital attack which exposes your business to cyber criminals.

As you’d expect, cyber liability insurance comes in many forms, and every provider has its own set of rules around exactly what you’ll be covered for. But one of the most important functions it has is to limit any damage caused by a data breach.

When you consider how damaging it could be for your business if that data got into the wrong hands, this form of insurance really starts to make sense.

 

What does cyber liability insurance cover?

Depending on the type of premium you opt for, cyber liability insurance will cover a range of potential breaches.

As noted earlier, each policy will be different, but there are some commonalities between all of them.

Most cyber liability insurance policies will provide cover for the following:

          data breaches resulting from employee theft;

          data hacks;

          data breaches following the loss of a data storage device such as an external hard drive or memory stick;

          serious business interruption; and

          denial of service attacks (this is where your website or web-based product becomes inoperable due to a cyber-attack).

 

Prerequisites for taking out cyber liability insurance

Before you purchase an insurance policy of this kind, you’ll need to do some homework.

It’s likely the provider will want to know about your existing processes and security controls. You’ll also need to identify the areas within your organisation which need the biggest insurance cushion should something go wrong.

It may also be worth looking at becoming certified under programs such as Cyber Essentials, because some insurers will provide discounts to businesses if they are.

 

Things to consider when picking cyber liability insurance

Cyber liability insurance won’t prevent you from attacks, nor does it mean you can relax your focus on mitigating them.

It’s important to think about your current approach to cyber security and how that might impact your choice.

For instance:

          are you providing regular training for staff?

          what portable devices are in use, and to which locations are they regularly taken?

          have you turned on data encryption and two-factor authentication where available?

          what online services are you using for data storage and business applications?

          do you encourage a BYOD (bring your own device) culture at work?

          are you keeping up with the legal changes that relate to cybercrime?

 

Do I need it?

The big question. Only, it isn’t, really.

We always recommend taking out some form of cyber security insurance, no matter how big or small your business. The level of cover you need depends entirely on the degree of risk you might be exposed to, and the potential damage if you’re subject to an attack.

However, cyber liability insurance doesn’t mean you can get away with shoddy cyber security practices or rubbish hardware. And that’s where we come in! So, if you need some cyber security advice, just get in touch with the Compex IT team.