The risk of a cybersecurity breach seems to increase daily, with companies large and small falling victim to hacks and attacks. In this threat landscape, many businesses have invested in cyber risk insurance to help mitigate the cost of a future attack. Also known as cyber insurance and cybersecurity insurance, these plans help organizations offset the expense of a breach or other security incident.
What Is Cyber Risk Insurance?
In a market where data breaches happen so regularly they often don’t make headlines, cyber risk insurance can help companies decrease their risk exposure. This type of insurance isn’t usually part of a standard business insurance package and will likely be a separate purchase, ranging from $5,000 to $25,000 for multimillion-dollar coverage. The offerings vary widely but cyber risk insurance usually covers the financial losses and damages resulting from an attack or data breach.
These plans are “a reasonable and effective investment in an era when ultra-sophisticated cyber thieves increasingly are defeating the security that surrounds many commercial online banking accounts” according to Krebs on Security. Add to the picture increasingly stringent data protection and security regulations around the world, and companies are looking for ways to handle the liability and costs of a breach.
Making Cybersecurity Insurance Part of Your Security Strategy
As of 2019, about one in three companies has already invested in cyber risk insurance. And according to an Allied Market Research report, the global cyber insurance market is expected to grow to $14 billion by 2022, with a compound annual growth rate (CAGR) of 28% for 2016-2022. But with the range of policies available, how can an organization know if they are getting the coverage they expect from their cyber risk insurance policy?
Navigating security decisions like determining the right cyber insurance policy can be tricky, particularly with loopholes like social engineering reduction clauses, which payout less if the security incident is the result of a social engineering attack. Partnering with a trusted and objective cybersecurity consulting firm can mean the difference between true risk mitigation and unprotected exposure.