Cybersecurity Insurance: What is it?

In a world where data breaches are becoming increasingly common, cybersecurity insurance is a must for any organization that stores or processes sensitive information. Also known as cyber liability insurance, this type of coverage can help to protect your organization in the event of a data breach, cyber attack, or other type of online security incident.

Cybersecurity insurance can help to cover the costs of forensics, data recovery, legal expenses, and customer notification in the event of a breach. It can also provide financial protection in the event that your organization is forced to shut down due to a cyber attack. While no organization is 100% immune from the threat of cybercrime, having cybersecurity insurance can help to minimize the financial impact of an incident.

What are the minimum cybersecurity insurance requirements

When it comes to cybersecurity insurance, there is no one-size-fits-all solution. The minimum requirements will vary depending on the type of organization, the size of the company, and the industry in which the company operates. However, there are some general guidelines that organizations should follow when choosing a cybersecurity insurance policy.

First, organizations should make sure that the policy covers all types of data breaches, including hacking, phishing, and other types of social engineering attacks.

Secondly, the policy should provide coverage for reputational damage, business disruption, and cyber extortion.

Finally, organizations should make sure that the policy limits are high enough to cover the costs of a major data breach. By following these guidelines, organizations can ensure that they have adequate protection against the growing threat of cybercrime.

What are the benefits of cybersecurity insurance

Despite the best efforts of even the most well-funded and experienced cyber security teams, data breaches can and do happen. That’s where cybersecurity insurance comes in.

By transferring the financial risk of a data breach to an insurer, nonprofits can safeguard themselves against the potentially devastating consequences of a cyber attack. In addition to covering the costs of response and recovery, a good cybersecurity insurance policy will also provide access to experienced crisis management and legal support.

This can be invaluable in the aftermath of a breach, when time is of the essence and every decision could have far-reaching implications. By taking out cybersecurity insurance, nonprofit organizations can protect themselves against the financial fallout of a data breach and ensure that they have the resources they need to bounce back quickly.

Cyber liability insurers also offer many other benefits such as free risk assessment tools, awareness training, guides and more to help their policyholders improve their security posture. 

How much does cybersecurity insurance cost

The cost of cybersecurity insurance varies depending on a number of factors, including the size of the company and the level of coverage. However, most insurance companies offer policies with basic coverage of around $1 million. This covers expenses such as customer notification in the event of a data breach, credit monitoring for affected customers, and legal fees. For companies that require a higher level of protection, there are policies that provide up to $100 million in coverage or more in coverage.

The cost of cybersecurity insurance varies depending on the size and type of organization, as well as the scope of coverage. Generally, organizations can expect to pay between $5,000 and $20,000 per year for cybersecurity insurance.

However, some policies can cost much more depending on coverage amounts. Organizations should work with an insurance broker to determine the most appropriate coverage for their needs. Cybersecurity insurance is an important part of any organization's risk management strategy, and it can provide some much-needed peace of mind in the event of a cyberattack.

Poor Security Means Higher Costs for Lesser Coverage

As insurance companies have been forced to pay out more frequent and more expensive claims due to rising cybercrime, the insurers are being far more selective in the organizations they will insure. Whereas as recently as five years ago an insurance company would write a policy with barely any questions, now the insurance companies are sending out increasingly rigorous questionnaires asking about the organization’s security posture. 

If you don’t have good security measures in place, your insurance premiums will be higher, your deductibles will be higher and your coverage will be lower. In some cases, insurers will flat out refuse to insure your organization if basic security measures, such as multi-factor authentication, are not in place. 

Wrapping Up

By making sure that you have appropriate coverage, you can ensure that you are protected against the financial consequences of a data breach. Don't wait until it's too late - get your security house in order so that you can get preferable terms for your cybersecurity insurance.

Still have questions about cybersecurity insurance? Our team of experts can help. Contact us today to learn more.