If you are like most of the general public, you have probably never heard of cyber insurance before. First off, you will need to know what this kind of insurance entails. A cyber insurance policy is meant to protect against the many risks of the digital world, particularly data breaches, hacking, ransomware, and other types of cyber-attacks. Not everyone needs this sort of insurance, but those with an increased level of cyber risk will find it to be indispensable.
Who Needs Cyber Insurance?
This can be a complicated question, but it all comes down to one thing: Are you or your organization likely to be targeted by a cyber attack? While this sort of thing can happen to anyone, some companies have a much higher risk than others. And so, let’s take a look at the six industries that are said to be the most vulnerable.
1. Small Businesses
This is a broad category, but it is true that small businesses are some of the most frequent targets. Yes, these smaller businesses don’t have as much money, but that doesn’t get them off the hook. In fact, cybercriminals are actually more likely to target small businesses. Why? Because they are usually an easier target. Most small businesses simply don’t have a lot of extra funds to put into cybersecurity, and the criminals are aware of this fact. According to one report, 43% of all cyber-attacks are aimed at small businesses.
The healthcare industry is also a frequent target. This is mostly because they store a lot of PII (Personal Identifiable Information). Patient records can sometimes contain information that will allow the criminal to defraud that individual or the healthcare institution itself. According to this report from a top healthcare industry journal, there were 686 major healthcare data breaches in 2021. When we say “major,” we are referring to breaches involving 500 records or more.
3. Government Agencies
This entry will undoubtedly surprise a few of you. Most people would assume that government targets are too risky for most hackers. However, they would be wrong. Unfortunately, many of today’s cybercriminals have found that they can even target government agencies with near-impunity. These agencies are often targeted for the same reason that healthcare companies are: Because they store a lot of personal information about many different people. In 2020, the U.S. Government lost nearly 19 billion dollars as a result of 79 ransomware attacks.
4. Financial Institutions
This label would include banks, lending organizations, and pretty much any company that handles money directly. This one shouldn’t be a big surprise, since these companies and organizations have a lot more assets for a criminal to potentially steal. However, financial institutions tend to have better cybersecurity protection than most others (largely because they can afford such!). Thus, financial institutions are relatively low on our list.
That being said, data breaches of this sort tend to be some of the most expensive. This is mainly because the financial industry is more heavily regulated than most. Thus, a major data breach will often result in costly fines.
Education-related technology resources are also frequent targets. This is probably due to the large amounts of technology resources that an educational institution uses. Modern education is highly dependent upon computers and the internet, and most users are not thinking a lot about cyber risks. These attacks are very frequent, but most of them tend to be low-level attacks like spam and adware. 2021 saw a record increase in the number of education-related cyber attacks, as there was a 50% increase over the previous year.
6. Energy And Utilities
Anything related to electricity, water services, ISPs, and fuels will likely fall into this category. Unfortunately, not all hackers are criminals. Some nations employ hackers as a weapon with which to cripple an enemy nation’s infrastructure in a time of war. During peacetime, they might use it to disrupt the operations of an economic rival. When these state-sanctioned cyberattacks happen, the energy industry is the most likely to be targeted. Apart from this, the energy sector is also frequently targeted by “hacktivists” who are opposed to their policies.
The Two Main Types Of Cyber Insurance
It is difficult to discuss the different types of cyber insurance because every company has its own methods and policies. There isn’t really any standardization in this field, which can make it hard to compare and evaluate plans. However, there are two main types of cyber coverage: First-party coverage and third-party coverage.
First-party coverage is meant to protect you from the direct expenses related to a data breach or cyber attack. These expenses might include the repair of damaged software or hardware, the labor costs involved in recovery and mitigation operations, a public relations campaign to help protect the company’s reputation, and/or the cost of a ransomware payment. Third-party coverage, on the other hand, is meant to protect you from other individuals and entities. Thus, it covers things like lawsuits, legal fees, government fines, or costly insurance claims from another company.
Although this is just a short introduction to a complex topic, we hope that all your questions have been adequately answered. If not, you can always call PCH Technologies at (856) 754-7500. Our helpful and friendly staff will be more than happy to tell you whatever you need to know.