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An essential protective measure, cyber insurance used to be fairly straightforward to obtain however, rising premiums and tighter terms now present challenges for those seeking the best cyber incident coverage.
This piece details cyber insurance coverage types and the benefits of cyber coverage. Additionally, find best practices for choosing a cyber insurance carrier and policy for optimal protection for your organization.
Cyber insurance is offered in categories of specialty insurance that protects businesses from liability in the event of data breaches. Cyber insurance is usually excluded from general organization liability insurance, so organizations need to purchase
this additional protection.
Several types of cyber insurance keep organizations protected in the event of data breach, client and ransomware liability. The extent of this cyber liability protection varies by policy. The most comprehensive cyber liability insurance covers legal expenses
and settlement costs if a client files a lawsuit alleging your organization failed to prevent data theft.
When looking at cyber insurance for your organization, first-party policies are a good starting point. First-party cyber insurance covers parties directly involved in the data breach incident, usually offering protection for a variety of scenarios like
data destruction, hacking, online theft, extortion, and deliberate or accidental service denial. Variations of first-party cyber insurance include: Technology, privacy, trademark and copyright infringement, network security liability and electronic
Cyber liability insurance packages apply to incidents caused by outside parties, whether that be third-party suppliers, vendors or contractors. These policies take into consideration errors of commission/omission, security breaches, data theft, business
secrets, defamation, and related negative publicity.
READ: Third-Party Cyber Insurance Coverage & Pitfalls to Avoid
Full cyber insurance offers extended protection with general benefits, including post-incident management, structured/planned security audits, and public relations. This type of cyber insurance also supports major investigations, reports, and criminal
reward funds following a data breach.
These policies are used in various ways to protect both organizations and clients from additional risk. One of the most common functions of cyber liability insurance is providing settlements to clients affected by a data breach.
Depending on the policy, cyber insurance may also be used to cover legal and forensic fees and bridge the gap to cover loss of income during downtime after a data theft incident. Crisis communication and damage control may also be covered in many cyber
insurance policies during incident response.
READ: Cyber Insurance Renewal Checklist
Organizations need to protect employees, clients, and sensitive information from sophisticated hackers. Cyber liability insurance is a worthwhile investment for organizations of all sizes as breaches increase with advanced methods to steal data. This
comes at a time when cybercrime has become all too common, with an 81% jump in cybercrime reports from 2019 to 2021, as reported by the FBI.
With that in mind, cyber insurance provides:
If your organization has been targeted by cyber criminals, you know all too well how costly the recovery process can be in the aftermath of a data breach. It makes sense to add an extra layer of protection, especially with so much at risk for your organization.
Even if you haven't been adversely affected by a cyber-attack yet, threats and risks are always there for businesses in every sector, especially as hackers get more brazen in their attempts to steal data and infiltrate organizations' digital assets. With
this heightened risk and a greater reliance on data and digital technology, cyber insurance is recommended for all organizations working with sensitive information, data and clients.
Cyber incidents are challenging enough to security teams and the organization with expenses, reporting and damage repair. Don't let sophisticated hackers steal your company's data and put you at additional liability risk. Be sure to add some much-needed
protection with the right cyber insurance liability coverage aligned to the organization.
Although reasonable efforts will be made to ensure the completeness and accuracy of the information contained in our blog posts, no liability can be accepted by IANS or our Faculty members for the results of any actions taken by individuals or firms in
connection with such information, opinions, or advice.
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