Millions of people and businesses fall victim to phishing schemes and hackers every year. The majority of data is now stored digitally, from books to social security numbers, making cybersecurity more important than ever. Every year, companies globally, lose millions of dollars as a direct result of data breaches, leading to the creation of cybersecurity insurance. Companies and individuals may be able to utilize cybersecurity insurance to recover some of the financial losses associated with a cyber-attack, but is it worth the investment? In this post we’ll discuss cybersecurity insurance, its benefits, and its drawbacks.
What is Cybersecurity Insurance?
Cybersecurity insurance, which can also be called “cyber liability insurance,” or just “cyber insurance,” is coverage that is designed to protect policyholders from internet-based risks like cyber-attacks. Depending on the plan, it can cover expenses associated with data breaches like profit losses from business interruption, legal fees, notification expenses, and recovery.
Is Cybersecurity Insurance Necessary and Effective?
Whether you or your company should utilize cybersecurity insurance or not largely depends on your business’s needs and the amount of data you use. If your business is a brick-and-mortar retail store, then it may not benefit you as much as it would benefit the company that creates your point of sale system. If your company handles large amounts of data, or extremely sensitive data even for a small client base, then it may be wise to have the safety net that cybersecurity insurance can provide. It can help with preventing potential lawsuits, regulatory fines, and create an effective approach to managing all cyber risks. Although you may be able to customize your coverage for your needs, like all insurance companies, they exist to make a profit, so you may recognize some quirks that you would find from other types of insurance.
What Does Cybersecurity Insurance Cover Exactly?
Most cybersecurity insurance plans will cover the costs “associated” with cyber-attacks. Essentially, it will assist in cleaning up the mess in the aftermath but has no proactive capabilities. It will not protect intellectual property or the potential lost income, internal cyber-attacks, or preventative maintenance and personnel training to proactively combat potential cyber-attacks. It also does not protect against property damage, so if computer data is corrupted or has malware beyond repair, it will not cover a replacement.
Although cybersecurity insurance is designed to help businesses get back on their feet after a cyber-attack, it’s important to note that they don’t actually retrieve lost assets. Even if the policy is comprehensive, it may not be sufficient enough to work alone. It’s best practice to utilize the appropriate preventative measures in conjunction with insurance, but even with perfect training and top-of-the-line data security software and encryption it’s still possible to experience a breach. In these scenarios, you need professional global asset recovery services.
When a company experiences a data breach, its data can be taken from anywhere in the world, making it difficult for a single jurisdiction to track down and recover lost assets. At STARNet, we help organizations, governments, and individuals all over the world locate and recover stolen assets related to cybercrime, fraud, and corruption. For assistance with your data recovery, visit our member page and reach out to one of our firms.
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