Both small and large businesses are facing heightened levels of cyber threats. For instance, between 2020 and 2021, security attacks increased by 31 percent, according to Accenture’s report. One security attack – whether it’s malware, data breach, DDoS attack, or ransomware – on average costs enterprises $200,000. Besides, a lot of the affected businesses closed shop six months after the attack, according to this Hiscox. Therefore, cyber insurance is an essential element of every enterprise’s risk management system.
Enterprises in all sectors face a constant threat of ransomware attacks. For instance, Emsisoft’s report estimates that in 2021, 2,323 healthcare providers, schools, and local governments were direct victims of ransomware attacks. A ransomware attack entails malware getting into your IT systems and encrypting vital data, effectively preventing you from accessing it. The attacker then demands payment before they can allow you to access your data. When getting a cyber policy, ensure it covers ransomware claims.
After a cyber-attack, your computer systems may not be functional, or you may be forced to turn them off for a while. According to research by Statista, on average, it takes enterprises 20 days to restore their systems after a ransomware attack. Therefore, ensure your cyber insurance has a business interruption or business income coverage that will cover your fixed expenses, extra costs, and lost profits during the period your enterprise’s computer systems aren’t functioning fully as a result of a cyber-attack.
If you rely on third-party technologies to operate, a cyber-attack on your technology providers can lead to a system failure that disrupts your business operations. In this case, insurers offer a “dependent business interruption” coverage that covers your fixed expenses, extra costs, and lost profits as your vendor restores the affected systems.
According to research by Trend Micro, 90 percent of cyber-attacks came from spear phishing emails. Spear phishing is essentially social engineering that entails attackers targeting particular individuals in an organization using their social media presence and then creating customized phishing campaigns specifically for the targeted individual(s).
Through the emails, the attackers can pose as a vendor or executive and dupe the targeted individual into wiring them money or providing certain sensitive company information. To protect against these types of cyber-attacks, you should ensure your policy covers wire transfer fraud or cybercrime.
Data or privacy breaches don’t always emanate from cyber-attacks. For instance, if a burglar or an embittered former employee takes off with sensitive files from your office, there is a risk that some of this confidential information, like credit card information, might be leaked. A comprehensive cyber policy covers all kinds of data breaches, including those that don’t directly emanate from cyber-attacks. Hence, to be fully protected, ensure your cyber insurance policy offers all-inclusive privacy liability coverage.
Cyber insurance is essential for all enterprises that store sensitive data in their computer systems. At CF&P Insurance Brokers, we will help you find a cost-effective cyber insurance policy that adequately protects your business. Contact us today to get adequate cyber insurance coverage.