Cyber insurance has become an increasingly important tool for businesses looking to manage their risk of cyberattacks. However, misconceptions still abound surrounding cyber insurance policies and what protections they actually offer. This article aims to debunk some frequent cyber insurance myths and provide reliable information to help you make informed decisions about safeguarding your organization.
Myth 1: Cyber insurance is too expensive and not worth it
This myth is false – cyber insurance can actually save money in the long run by covering expenses stemming from data breaches, network disruptions, and other cyber incidents. The costs include legal liability, crisis management services, lost income, and reputational damage control. Rates depend on your business size, industry, revenue, data volumes, security posture, and desired coverage options. Premiums are an investment that can pay dividends if the worst occurs.
Contrary to the myth, cyber insurance is a prudent investment that can save businesses from devastating financial losses in the long run. It covers a gamut of expenses and losses stemming from cyber-attacks, including:
- Crisis management
- Legal liability
- Business interruption
- Reputational damage
Factors like the size and nature of the business, level and type of coverage, along with the organization’s security posture, influence the cost of cyber insurance, making it a flexible option.
Myth 2: Good security means you don’t need cyber insurance
Robust security is important, but not a guaranteed prevention against cyberattacks. Data breaches can still occur due to human error, insider threats, zero-day exploits, or social engineering tactics that bypass firewalls and malware detection. Cyber insurance provides another layer of protection when incidents do occur. It also helps cover costs to resume operations quickly and comply with breach disclosure laws.
Myth 3: Cyber insurance doesn’t cover human mistakes or new tech
In fact, human mistakes like accidental data exposure or falling for phishing scams can be covered by cyber insurance. Policies can also protect against incidents stemming from adopting new technologies like IoT devices or cloud platforms that introduce new attack surfaces. Just be aware of policy exclusions like intentional illegal acts.
Myth 4: Cyber insurance doesn’t pay claims or is hard to get
This myth is far from truth. Claim payment and satisfaction rates are favorable, showcasing the reliability of cyber insurance policies. Data shows cyber insurance carriers are paying out on policies at an increasing rate. The claims process is designed to move swiftly so businesses can quickly access funds. Most insurers are actively writing policies as cyber protection becomes more of an imperative. Working with an experienced broker makes navigating policy options simpler.
Tips for procuring a cyber insurance policy include:
- Working with a reputable broker
- Comparing different coverage options
- Reviewing policy terms and conditions thoroughly
Myth 5: Cyber insurance is just for big online companies
All companies face cyber risk today. Small and medium businesses are tempting targets for attackers and often lack resources to recover from incidents. Cyber insurance helps SMEs offset costs of breaches, retain customers after an attack, and satisfy clients wanting proof of insurance. Obtaining coverage is a smart business move.
- Cyber insurance helps cover costs if attacks occur despite security controls.
- Policies cover human errors, new technologies, and a range of incident response services.
- Insurers actively write policies tailored to your unique risks and needs.
- Cyber insurance lets all businesses, especially SMEs, mitigate financial damage.
- Lost income and recovery costs, legal and liability expenses, breach notifications, PR services, ransomware payments, and more.
- Companies of all types and sizes that collect or store sensitive data. Especially small businesses with limited security budgets.
What factors affect cyber insurance costs?
- Industry, revenue, data volumes and sensitivity, security posture, and coverage options.
How does the claims process work?
- Notify insurer ASAP after an incident, provide evidence, work collaboratively on response, receive payouts for covered expenses.
Don’t let misconceptions deter you from seeking cyber coverage suited to your business. Connect with us today to explore policy options that make sense for your organization.