The technology landscape changes constantly, and with it does the sophistication of cyberattacks. Cyber threats have become more frequent and more advanced in recent years, making cybersecurity a top priority for businesses and organisations of all sorts.
However, there’s always a risk of cyberattack penetrating your security systems, regardless of how advanced your cybersecurity is.
That’s why cyber insurance is such an imperative part of running a business that conducts operations online. Cyber insurance protects you from a lot of the types of damages that can come from cyberattack, such as data loss and privacy breaches.
So, what exactly does cyber insurance cover? Here, the specialists at Real Innovation Group explain everything you need to know about cyber insurance, and everything it can cover.
What is cyber insurance?
Cyber insurance is a simple concept; a cyber insurance policy protects you from damages caused by cyberattack, just like a home and contents insurance policy protects you from damages caused by a fire or flood.
What cyber insurance covers:
Cyber insurance policies can cover a broad range of expenses incurred by cyberattack. Cyber insurance policies are adaptable, and can be catered to your business’s specific needs. A good quality cyber insurance policy should include areas like:
- Forensic investigations
Forensic teams are needed to assess the damage of cyberattack.
- Litigation expenses
Legal work will most likely be required, and can incur large fees.
- Regulatory defence expenses/fines
Regulatory fines and penalties are brought against your business for privacy breaches.
- Crisis management expenses
Crisis management expenses refer to the costs incurred by managing public relations in the form of news releases, campaigns, advertisements and more.
- Business interruption
Cyberattack can interrupt business, sometimes for days, costing large sums of money to your company.
- Cyber extortion
Cyber extortion involves demands for money from hackers who hold your electronic files hostage.
Examples where cyber insurance makes all the difference
To learn about the importance of cyber insurance, it’s best to look at real life examples in the past where cyber insurance was essential in mitigating damages, or could have been essential in mitigating them – had it been employed. Here are some of the most famous examples of cyberattack in recent years, and how cyber insurance played a life-saving role:
- 2014 Target data breach
In 2014, Target US suffered a data breach which saw 110 million customers having their credit card information stolen when a third-party vendor, a HVAC contractor, had its network credentials stolen by cybercriminals. It was estimated that Target lost up to $420 million due to the breach.At the time, Target had only a $100 million cyber insurance policy. While this meant that they still saved $100 million in damages in comparison to if they had no insurance policy, they still lost hundreds of millions of dollars as their insurance policy wasn’t comprehensive enough.
- 2017 WannaCry ransomware attack
Ransomware attacks can be included in your cyber insurance policy to provide protection from the damages they can cause. In 2017, the WannaCry ransomware attack managed to compromise over 200,000 PCs, and the criminals behind the attack were able to shut down huge companies like FedEx, Nissan and the UK National Health Service, among many others. These businesses and organisations weren’t able to operate for a number of hours, making it one of the world’s largest cyberattacks and causing an estimated loss of $4 billion in total.In the first half of 2017, data revealed that the WannaCry attack was the single biggest motivator for companies searching for cyber insurance policies – and for good reason, too. It acted as a wake-up call for businesses which didn’t have cyber insurance policies.
- 2017 Equifax data breach
In 2017, over 147 million Equifax customers had their data stolen, resulting in Equifax being ordered to pay a total of $425 million in compensation. A huge breach with an even larger price tag, Equifax thankfully had cyber insurance which covered $150 million, but still left them with hundreds of millions of dollars in compensation to pay out of their own pockets.
Real Innovation Group are delighted to invite Australian businesses to invest in flexible and scalable cyber insurance policies, tailored to their needs. Real Innovation Group are Australia’s experts in managed services, cyber security and cyber insurance, too. A team committed to flexibility and openness, Real Innovation Group are driven to provide you with the best cyber insurance policy for your organisation. Talk to the team about securing a great policy today.
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