What Is Cyber Insurance?
In today’s digital landscape, there are a growing array of cyber threats for business owners to consider. Cyber Insurance, also known as cyber risk or cyber liability insurance, is designed to protect you from the potentially crippling financial and reputational impact of such threats. This includes losses arising from computer hacking, data theft and ransomware, or disruption to your business operations caused by cyber attacks. Just like physical assets require insurance protection, your digital assets require the same level of care – this is where Cyber Insurance comes in.
Cyber Insurance is no longer a luxury—it is a necessity. Online risks extend beyond ‘large-scale’ attacks. It could be something as simple as attaching the wrong file to a customer’s email, losing a piece of hardware like a phone or laptop or clicking on a malicious link in an email.
And it’s not just the financial cost of cyber crime that you need to consider. Your customers’ personal information could be at risk along with your intellectual property and ultimately the reputation of your company.
Cyber Insurance can give you the peace of mind that your business and reputation are protected should you or a member of your team fall prey to hackers. Let one of AIB’s expert business insurance brokers help you find a policy that is best suited to your industry, budget and needs.
Who Should Consider It?
Cyber threats aren’t restricted to just high-tech industries or multinational corporations; any business with an online footprint is vulnerable.
This includes:
- E-commerce businesses: Online stores are prime targets for cyberattacks.
- Healthcare providers: They handle sensitive medical data, making them vulnerable to data breaches.
- Financial services: Banks and financial institutions are at risk due to the valuable financial data they possess.
- Small and medium-sized enterprises (SMEs): They are often targeted as they may have less robust cybersecurity measures.
- Professions handling sensitive data: Lawyers, accountants, and consultants should also consider Cyber Insurance.
Moreover, whether you’re a solo practitioner relying on a digital client base or a mid-size business employing an extensive IT network, the size of your operations doesn’t diminish your vulnerability. If you hold sensitive customer data, run a website or operate an email system, considering Cyber Insurance is essential.
What It Can Cover
Cyber Insurance policies vary in the benefits they provide. Your AIB insurance broker can help you find the most suitable product that meets the needs of your business. Here’s the type of cover that your policy may include:
First party losses
Business interruption losses
Covers financial loss you may suffer as a result of a cyber attack.
Cyber extortion
The costs of a cyber attack, such as hiring negotiation experts, covering extortion demands and prevention of future threats.
Electronic data replacement
The costs of recovering or replacing your records and other business data.
Third party losses
Security and privacy liability
Defence costs
Funds the legal costs of defending claims.
Regulatory breach liability
Covers legal expenses and the costs of fines arising from investigation by a government regulator.
Electronic media liability
The costs of copyright infringement, defamation claims and misuse of certain types of intellectual property online.
Extra Expenses
Crisis management expenses
Provides cover for the costs of managing a crisis caused by cyber hackers.
Notification and monitoring expenses
The costs of notifying customers of a security breach, and monitoring their credit card details to prevent further attacks.
Exclusions and the excess you need to pay can vary greatly depending on your insurer. Policies generally won’t include cover for:
- Damage to computer hardware.
- Criminal actions committed by you or your business.
- A cyber attack based on facts of which you were aware.
- Criminals using the internet to steal money from you.
There are other exclusions which your AIB insurance broker can outline.
How Can Cyber Insurance Protect You?
Case Study
Your employee opens an email attachment infected with a ransomware virus. Access to your systems and data are blocked and the virus software informs you that it will remain unavailable unless you pay the ransom amount. Rather than paying the hacker and opening your business up to further extortion attempts, you hire external IT consultants to recover your back-up data and files and upgrade your antivirus software.
Over the week it takes to apply these fixes, you have to close your business, causing you to lose revenue. It also affects your reputation with your clients; one of your clients threatens to sue you for the delay which cost them a large amount of money.
A Cyber Protection Insurance policy allows you to recover some of the costs you incur during this incident. Depending on your policy, you may be able to make a claim for losses caused by the interruption to your business, the costs of recovering your data and upgrading your software, and ongoing crisis management expenses.
