Does Cyber Insurance Only Protect Me For Data Related Breaches?
Caeva O'Callaghan | October 14th, 2021
You might be wondering if cyber insurance is a good idea. But does it only cover you in the event of a data leak?
No. Your cyber insurance policy will protect you from many more threats than data breaches alone.
This is why cyber insurance is so important. It provides coverage for email scams, phishing, malware and more.
In this article, we’ll go over the following questions:
- What is a data breach?
- What does cyber insurance protect against?
- What should I do if I’ve been hacked?
No matter the kind of cyber attack, your policy will provide you with help and advice as well as get your systems back up and running.
What is a data breach?
A data breach is the intentional or unintentional release of private, secure or confidential information to an untrustworthy environment.
Data breaches are also known as leaks, or unintentional disclosure. You may have heard such terms used by large corporations to downplay a data breach event. In reality, data breaches are extremely serious.
The more sensitive data companies handle, the more attractive this data can be to criminals, the more security companies need to keep it safe. Such valuable information might include names, addresses, credit card information and more.
Globally, the average total cost to a company of a data breach is $3.86 million, according to a study by the Ponemon Institute. This means an average of $148 per stolen record – a cost not many small or medium businesses could afford.
What does cyber insurance protect against?
Cyber insurance will cover your business against any kind of data breach or system malfunction as a result of criminal activity. If criminals steal your or your customers’ sensitive data, having cyber insurance will help pay for costs you incur while fixing the problem and making sure it won’t happen again. If they damage your networks, your insurance will help pay for getting them back up and running with minimal downtime.
Cyber insurance can cover costs such as, but not limited to:
- Loss of income
- Forensic investigation services
- Security upgrades
- Legal fees
- Regulatory fines and compensation
If you’re unfortunate enough to become a victim, cyber crime can severely impact your business revenue. Loss of income as a result of damage to your reputation is likely, as you are legally obliged to notify your customers if you suspect their data may have been stolen, and this may affect their decision to renew your services. They may also leave unfavourable reviews online and via word of mouth.
You may even need to shut down or suspend trading for a certain period of time while you sort out the damage and put new security procedures in place. This can be very expensive.
What should I do if I’ve been hacked?
The first step is always to confirm a breach has happened, and if so, if sensitive information has leaked.
Next, find out what kind of data was stolen or what systems have been impacted. This is important, because it will determine if you need to report it to the Data Protection Commission (DPC).
Any organisation which handles data is obliged to notify the DPC of any personal data breach that has occurred. But, they don’t have to if they are able to demonstrate that the personal data breach is ‘unlikely to result in a risk to the rights and freedoms of natural persons’.
For example, if the data only contained first names, this is unlikely a risk to those individuals’ rights and freedoms. However if your data included bank details in connection with those first names, that would be much more dangerous.
Prevention is always better than cure. Avoid making a claim on your cyber insurance by following these tips:
- Using strong passwords with upper and lower case characters, numbers and symbols where possible
- Check financial accounts regularly and monitor for suspicious activity
- Secure your phone with a password or fingerprint sensor
- Back up your files to ensure their safety
Cyber attacks are not limited to data breaches. If you have any questions regarding cyber insurance, pick up the phone and talk to our experts today. We can guide you through all the options for your business.
All Information in this post is accurate as of the date of publishing.