We currently live in a world rapidly increasing its technological capabilities and this type of change affects all levels. Although this implies new opportunities, it also brings new risks to be address. The 21st century has shown us that the main threats are virtual or “cybernetic”. Although sometimes this type of risk seems complex and might sound only applicable for governments and large companies. The truth is, SMEs that are most vulnerable to cybercriminals. That is why all companies must give serious consideration towards buying insurance against cyber attacks.
An insurance against cyber attacks is one that has coverage against cyber risks such as malware, DDos, ransomware, etc.
Although today there is no uniformity in the offer of this type of insurance, it could be said that there are two types of insurance.
Cyber liability insurance
With coverage of third party damage:
- Incident management
- Notification to those affected
Insurance against losses direct or own damages
That cover the damages caused to the company:
- Coverage against malware such as: ransomware, exploit, DDos, etc.
- Legal coverage in case of: domain theft, defamation, etc.
- Incidents of Cybersecurity such as: unauthorized access, extortion, etc.
According to Julio San José, an expert in the area, this type of insurance will take time to become popular, due to the low supply by insurance companies. This is due to the lack of data for the calculation of premiums in policies and the high degree of uncertainty that it ends up being transferred to the cost of the product.
Why buy insurance against cyber attacks?
- There is a constant increase in the number of cyber attacks against companies:
This fact makes it clear that, just as the material assets of your business are protected like buying car insurance to be safe from damage from those around you, you must ensure the digital aspect of the company is protected as well to protect the confidential information.
- SMEs are the target of 70% of computer attacks:
This figure speaks for itself. It is ignorant to think that only large companies are vulnerable, especially knowing that for small businesses the economic impact of this type of attack is much higher.
- Spanish companies are one of the most vulnerable to cybercrime
Cyber attacks provide very complete cybersecurity audits on possible security failures, which can help the company to improve its computer protection measures.
- Coverage of the cost of recovering the stolen data:
Many policies provide coverage for the costs associated with the loss of data, compensation for those affected, etc.
- Compensation for losses and expenses derived from the cyber attack
If the insurance includes damages caused to the company itself, it may assume the internal costs of the attack, legal advice against its consequences, and even economic sanctions may be imposed.
- Containment of the reputational crisis
One of the consequences of a cyber attack is the loss of credibility with customers and the public in general. The fact that the company has taken out insurance makes it appear more responsible to the public and will prevent a possible reputational crisis from tarnishing its brand.
If you think there are enough reasons to buy insurance against cyber attacks, we advise you to take into account which kind before choosing it. Focus your search on coverage and exclusions that best adapt the risks of your sector and advising you on security issues.
If you want more cybersecurity tips you can visit our Hushapp blog.