Cyber Insurance (2024)

FAQs

What is the cyber insurance? ›

A cyber insurance policy helps an organization pay for any financial losses they may incur in the event of a cyberattack or data breach. It also helps them cover any costs related to the remediation process, such as paying for the investigation, crisis communication, legal services, and refunds to customers.

Today, the average cost of cyber claims is substantial, far exceeding the average cost of cyber premiums. And considering the proactive and reactive services on offer, it's clear that cyber insurance is more than worth the money.

Any business that stores or processes sensitive information should consider cyber liability insurance. Consider coverage if you store data such as customer names and addresses, Social Security numbers, medical records, and financial information such as credit card information.

Loss of value through intellectual property (IP) theft

Often, they won't recognize IP theft until long after an incident (for example, when a competitor takes a new product to market). Nevertheless, devaluation due to IP theft is a loss most cyber policies don't cover.

Cyber insurance covers the liability actions that might be brought against you, arising out of a cyber event (third party loss), such as investigation and defence costs, civil damages, compensation payments to affected parties.

Personal cyber insurance covers individuals for their personal online security risks and financial loss due to cybercrime. Cybercrimes and risks include: Online account takeover or compromise. Expenses incurred or financial loss due to identity theft or social engineering scams.

“As can be expected, businesses with billions in revenue are far more likely to purchase cyber insurance coverage than small-to-midsize businesses or organizations with more minimal revenue or perceived lower risk,'' Wisniewski says.

Bodily injury and property damage – This coverage, standard under a commercial general liability policy, is excluded in cyber insurance as a person cannot be physically injured by having their data exposed when your business's database is infiltrated.

How much does cyber insurance typically cost? For small businesses, annual cyber insurance premiums can range from $1,000 to $7,500. This range is dependent on several factors, which we discuss below. A recent survey found that the majority of cyber insurance underwriters expect rates to increase slightly in 2024.

Demand, losses, and premiums are all on the rise

The demand for cyber insurance coverage is skyrocketing. At the same time, insurance providers' losses are growing. High demand in combination with high payouts lead to increased premiums. Businesses report premium hikes of 50% and even 100% year over year.

Can I buy cyber insurance? ›

You can buy cyber risk insurance directly from an insurer or from a broker. You can find brokers specialising in cyber insurance through the British Insurance Brokers' Association (BIBA).

If you own a business that collects or stores sensitive information, such as customer/supplier data or financial information, you may be at risk. Cyber insurance can help protect you from the financial consequences of a breach of these data and a disruption of your business.

Most small businesses purchase a cyber liability insurance policy with a $1 million per-occurrence limit, a $1 million aggregate limit, and a $1,000 deductible.

The chances are that this data is either sensitive information or could be used to attack your digital infrastructure if it fell into the wrong hands. If this happens and you are uninsured, the business will be held 100% responsible.

Cyber insurance generally covers your business' liability for a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver's license numbers and health records.

Cyber insurance can be essential in helping your company recover after a data breach, with costs that can include business disruption, revenue loss, equipment damages, legal fees, public relations expenses, forensic analysis and costs associated with legally mandated notifications.

Cyber insurance, also known as cyber liability insurance and cyber security insurance, enables businesses to reduce their cyber risk. The best policies offer broad coverage, protecting against a variety of cyber incidents from ransomware attacks and data breaches to cryptojacking and social engineering.

A firm's employee unwittingly clicks a link in a phishing email resulting in ransomware locking out the firm's ability to utilize business critical technology until a ransom demand is paid (or they're able to restore network from back-ups).