Is Cyber Insurance Worth It?

Cyber insurance covers companies or individuals against the financial losses and damages caused by cyber-attacks, data breaches, and other types of online security breaches, but is cyber insurance worth it?

Cyber insurance can help to cover the costs associated with recovering from a cyber attack, including legal fees, loss of income, and damage to reputation. It can also provide liability coverage for businesses if they are liable for failing to protect customer data.

In this insight, we are going to cover why cyber insurance is important whether you need it for your business.

Key Takeaways

• Cyber insurance will cover the financial damage caused as a result of a cyber attack.
• All businesses should consider whether they need cyber insurance as cyber crimes increase year on year.
• Many cyber insurance policies include a 24/7 cyber security support team, to assist if a live cyber attack occurs.
• Failing to protect confidential business systems is responsibility of the business owner.

Is Cyber Insurance Worth It?

Cyber insurance may be worthwhile if a person or business has sensitive and valuable data that could be targeted by a cyberattack in order to guard against possible financial damages and losses.

Additionally, cyber insurance can aid in covering any potential fines or penalties if a person or corporation is forced to follow particular rules or laws related to data protection.

However, cyber insurance may not be required if a person or firm has little to no sensitive data or is exempt from any regulatory requirements.

Is Cyber Insurance Worth It for Businesses?

According to the UK National Cyber Security Centre (NCSC), over 4,000 businesses and organisations were impacted by cyber attacks in 2022. All businesses that store or process sensitive data, including personal information of customers or employees, and financial information, should consider purchasing cyber insurance.

This includes businesses in the financial, healthcare, retail, and technology industries, as well as small and medium-sized businesses.

Additionally, businesses that rely heavily on technology and the Internet for their operations may also benefit from cyber insurance.

When there is a cyber breach, who is at fault?

Since there may be several parties participating in a cyber breach, it is challenging to pinpoint who is to blame. The attack was carried out by the hackers that carried out the breach. But failing to sufficiently protect their systems and data will also be the responsibility of the targeted business or person.

In the end, a thorough investigation and legal assessment may be necessary to establish liability in a cyber breach.

How can you protect your business from a cyber attack?

• Regularly update and patch software and systems to address known vulnerabilities.
• Implement strong password policies and regularly change passwords.
• Use firewalls and other security measures to protect against unauthorised access to networks and systems.
• Educate employees on cybersecurity best practices, such as avoiding suspicious emails and links.
• Invest in cybersecurity insurance to provide protection and support in the event of a cyber attack.
• Regularly monitor and review security protocols and update as needed.
• Consider hiring a cybersecurity expert or consulting firm to conduct regular assessments and provide recommendations for improving security.

What types of cyber insurance claims are most typical?

Data breaches, malware attacks, ransomware assaults, and business delays as a result of cyberattacks are the most often reported claims for cyberinsurance.

Data Breaches

A data breach is a situation in which an unauthorised person or group gains access to or steals sensitive or personal information.

Personal data like names, addresses, National Insurance Numbers, financial data, or confidential business information can fall under this category. For both individuals and organisations, data breaches can have detrimental effects that include financial losses, reputational harm, and a loss of customer trust.

Malware attacks

In a malware attack, harmful software, commonly referred to as malware, is purposefully placed on a victim's computer or device without that victim's knowledge or agreement. A malware assault often aims to impair the device or network's regular operation or obtain unauthorised access to sensitive data.

Malware can spread through a number of channels, including email attachments, compromised websites, and network weaknesses. It can manifest as viruses, worms, Trojan horses, ransomware, and spyware.

Ransomware attacks

In a ransomware attack, the victim's data is encrypted and the attacker requests money (often in the form of cryptocurrency) in return for the decryption key. Until the ransom is paid, the victim cannot access their data.

Attacks with ransomware can have a severe negative impact on a person's or organisation's finances and reputation.

What does cyber insurance cover?

Cyber insurance typically covers a range of potential losses and liabilities resulting from cyber incidents, including:

• Data breaches and unauthorised access to sensitive information
• Loss or theft of electronic data or hardware
• Loss of business income resulting from a cyber attack or data breach
• Legal expenses and fines resulting from regulatory violations
• Reputation management costs associated with a cyber incident
• Cyber extortion or ransomware attacks
• Notification and credit monitoring costs for affected individuals
• Cybersecurity consulting and response services.

How much does cyber insurance cost?

Several variables, including the size and kind of the organisation, the desired level of coverage, and the perceived amount of risk, might affect the price of cyber insurance in the UK.

However, businesses should anticipate spending between £500 and £1,500 annually for complete cyber insurance coverage. However, it can be as little as £15 a month.

Can the ICO protect me against cyber attacks?

The ICO (Information Commissioner's Office) is the UK's independent body responsible for upholding information rights and protecting personal data. To protect individuals against cyber attacks, the ICO:

• Offers guidance and advice on how to keep personal data safe and secure online, including tips on creating strong passwords, using two-factor authentication, and avoiding scams and phishing attacks.
• Investigates and enforce against organisations that fail to adequately protect personal data, issuing fines and other penalties where appropriate.
• Maintains a register of data controllers, which allows individuals to check whether organisations are registered and compliant with the relevant data protection laws.
• Provides a complaints service for individuals who have concerns about how their personal data has been handled by an organisation.
• Offers support and advice to organisations on how to comply with data protection laws and protect against cyber attacks.

Overall, the ICO aims to promote best practices and hold organisations accountable for protecting personal data, thus providing individuals with greater protection against cyber attacks.

Seeking Advice on Cyber Insurance

Cyber insurance policies are bespoke to your business needs. The level of cover you need depends on your IT infrastructure. The factors to consider can make it difficult to accurately cover your business when selecting a policy, especially if you aren't sure of what is needed.

But, is cyber insurance worth it? It is certainly a good idea to talk through your business requirements with an Insurance adviser to help you determine your cyber risk. To get started with a no-obligation chat with an insurance adviser who specialises in Cyber insurance, complete the Sunny Fact Find for Business protection & Insurance.