Cyber insurance is the new must-have risk management tool for businesses operating in today’s digital world. A cyber breach can have devastating effects on a company’s reputation, stock price, and bottom line.
This year alone, we’ve already seen the number of cyber attacks rise to 3 million. This reality means that cyber insurance is no longer a niche product but rather an essential element of any risk management strategy for businesses operating online or storing sensitive data electronically.
According to Markets and Markets, by 2027, the global cybersecurity insurance market is projected to grow to 29.2 billion by 2027, from USD 11.9 billion, growth driven by the increase in cyber attacks, fear of financial loss, and the growing number of compliance requirements.
If you’re one of the many businesses thinking about getting cyber insurance and also want to understand cyber insurance requirements, then keep reading. This blog will share some things to keep in mind when reviewing different policy options.
But first, let’s cover the basics.
What Is Cyber Insurance?
Cyber insurance is a type of insurance that helps protect businesses from losses caused by cyberattacks. This type of insurance can help cover the cost of data breaches, cybercrime, and other cyber incidents. Companies of all sizes can benefit from cyber insurance, but it is vital for small to medium-size businesses. Most SMBs typically have fewer resources to dedicate to cybersecurity, which makes them more vulnerable to attacks. And also makes it more difficult for them to recover from a cyber attack.
Now that we’ve gotten the basics out of the way let’s get into it...
9 Key Coverage Elements For Cyber Insurance
Of course, there are many other options available, but these are the key coverage elements and cyber insurance requirements you should ensure your policy includes. By ensuring your policy consists of these coverage elements, you’ll be covered for the primary and most costly things in the event of a cyber attack.
1. Personal data breach coverage: A personal data breach can affect a company’s reputation, and costs associated with notifying customers and/or paying fines could be substantial. This coverage can help defray those costs and minimize the risk of a lawsuit.
2. Cyber extortion coverage: Cyber extortion, or the threat of a data breach, is a real risk for many companies. This coverage can help you respond to and mitigate against potential cyber extortion.
3. Cyber fraud coverage: Cyber fraud occurs when someone uses fraudulent means to obtain money from you. Cyber fraud coverage can help cover the cost of investigating and recovering from such incidents.
4. Cyber property damage coverage: Property damage arising out of a cyber incident can be costly to repair. This type of coverage can help you cover the cost of repairs to your systems.
5. Cyber loss of income coverage: If a data breach causes you to lose customers and/or revenues, cyber loss of income coverage can help cover that lost income.
6. Regulatory coverage (including fines and penalty coverage): If your business is subject to data protection laws, it is essential to ensure that your cyber insurance policy includes regulatory coverage, or you could end up paying thousands or millions in fines to the government like Marriott.
7. Legal Fees Coverage: Legal fees are one of the highest potential costs of a cyber attack. Being sued and having to pay out a hefty settlement is very likely. If your business is the victim of a data breach, you may need to hire a law firm to help you with the fallout.
8. Forensics Coverage: This type of coverage will help pay for the costs of an investigation if your company is the victim of a data breach or cyber attack
9. Public Relations Expense Coverage- If your company suffers a data breach, having PR coverage in your cyber insurance policy can help you manage the fallout and protect your reputation.
How Much Cyber Insurance Do You Need for Your Business?
There is no one-size-fits-all solution and no set cyber insurance requirements in cyber insurance. The amount of coverage you need will depend on several factors, including the size and scope of your business, the type of data you store, and the level of risk you are comfortable with.
For example, companies that store and handle sensitive information such as payment card information (PCI), personally identifiable information (PII), or protected health information (PHI), are at even greater risk – not only for attacks but also for government compliance fines in the event of a breach.
There’s a lot to think about when it comes to cyber insurance. But don’t worry, at 1Fort, we’ve got you covered (literally). It’s our mission to empower businesses, especially small businesses, with accessible and enterprise-grade digital protection.
Bridging the gap between cyber security and cyber insurance, 1Fort gives you the peace of mind you need to run and grow your business. Try 1Fort today for free!