Kinds of Cybersecurity Insurance
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Kinds of Cybersecurity Insurance
Network outage as well as data breach is a common problem that plagues almost every business around the globe. According to a study, small enterprises are one of the biggest victims (around 71%) of cyber based attacks. Such attacks often rob the organization of its reputation, customer and above all finances. Given such a scenario, it would only be wise of businesses to choose from among the different kinds of cybersecurity insurance available in the market today. Why? Well to begin with such an insurance policy reduces the costs related to investigating as well as resolving any security related incident, thereby allowing businesses to make a comeback faster. In this article, find out more about the different types of cybersecurity insurance that are worth your time and investment.
What is Cybersecurity Insurance?
Before delving deeper into the kinds of cybersecurity insurance, you need to know what exactly they are. In simple terms, cybersecurity insurance allows companies to recover their lost data post a security/data breach or any other cyber incident like interruption of service or network outages. A cybersecurity policy is unlike general or property liability insurance policies since the prices as well as exclusions for the same vary from one insurer to another. It deals with the costs incurred as part of the immediate responses made during a data breaching incident
Types of Coverage Businesses Can Expect
When it comes to cybersecurity insurance, businesses can expect two different types of coverage including 1st party and 3rd party coverage. While, most of the insurers combine the two distinct types of coverage to provide their policies, it may not be the case always. Many insurers also mention the exclusions as well as the provisions in their 1st or 3rd party insurance policies, which is precisely why businesses must always cross check and read the policy document to fully analyze the type of coverage that the company would offer in case of a data breach incident.
In most of the cases, businesses require a 1st party coverage as it safeguards them against multiple incidents such as:
- Lost or damaged digital software and data
- Lost opportunities or higher costs of operation owing to an interruption of computers.
- Cyber based extortion in case the hacker thinks of holding the business’s or individual’s data in order to extract ransom.
- Stealing of money via an electronically committed crime.
On the other hand, the 3rd party cybersecurity insurance coverage covers 3rd party organizations that manage the system, network or software holding the breached data. The 3rd party coverage covers costs related to events such as:
- Breach of security pertaining to an employee’s confidentiality.
- Customer information and data that has been lost.
- Notification from customer post security breaches.
- PR efforts and combating IP (Intellectual Property) and defamation issues.
To sum up, breaches and hacks are increasing with every passing day. However, if businesses take the right security measures then they can very well safeguard their networks and operations against all kinds of cyber incidents and attacks.