Can Cyber Insurance Protect Your Company’s Data?
Since the coronavirus outbreak, every office, market and organization closed down, and Work from home became the new normal. Companies all around the world started adapting to this new normal but in the meanwhile, another threat was rising every day, the threat by cyber-attackers that took the WFH norm as an opportunity. The rise in cyber attacks during the pandemic also became an opportunity for cyber insurance policy providers to sell as many products as they can.Read more
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The SolarWinds attack highlighted the increasing threat in the world that was happening on a very large scale. As per the report of the World Economic Forum, Cyberattacks are at the top of the list of manmade risks in the world. As companies now a days prefer storing their data on a secure cloud online instead of keeping physical documents, this comes with a responsibility to keep that data secure. In case a hacker got a hold of that data then they can blackmail the company for ransom. This is where the cyber insurance policy comes up.
So, now you must be thinking that what does cyber insurance cover? Let us tell you about that.
Cyber Insurance Cover
A cyber insurance policy is designed to protect a company against any cyber attack that includes malware, Denial or service attacks, ransomware, etc. There are some policies that provide cover for email spoofing, cyber extortion, phishing, etc. The insurance policy also provides cover for the following lawsuit and investigation after the cyber attack.
When hackers try to hack into a company’s online data, they have to break firewalls provided used by the online threat-resistant software. Once they break into it, they encrypt it according to them and the company loses acces to that data. Then hackers blackmail the company for ransom. To keep the data protected, the companies have to rely upon the insurance policy.
There are sometimes when the extensive use of the CPU during a cyberattack takes place, the system literally burns down due to excessive heat. There are some plans that provide cover for the hardware as well. So, how much does the policyholder have to pay for the cyberattack?
Cost of Cyber Insurance
The big companies with high revenue opt for insurance policies that ranges from Rs. 30 Crores to Rs. 180 crores as SI. The premium amount of these policies range from 1-4% of the SI. There are several factors that decide the cost of cyber insurance. If the company functions in the pharmaceutical, healthcare, and banking as they got a hold of their customer’s information then their insurance cost would relatively be higher.
Also, when the company opts for a cyber insurance policy, the preparedness of the company against fighting cyber crime also plays a huge role in determining the cost of the policy. The insurer checks if the company is taking enough security measures to prevent any cyber attack. If the company does not have a strong cybersecurity defence system then the insurer calculates the probable maximum loss thus increasing the premium rates of the policy.
For Example, when a company starts growing, the data also starts increasing and the company has to purchase online cloud storage system to store their data. Then they protect it with a firewall and anti-malware system and the IT team keeps monitoring it. In case there is an attack, a quick response team starts working on it to prevent that cyber attack. So, when a company goes to purchase the cyber insurance policy they insurer make sure to cross-check all these things and then provide the protection.
The insurance policy provides cover only when they will know for sure that the company has a great quick response team and using good anti-malware and firewalls. Cyber insurance has been a point of discussion in India for a while there are around 15-20% of companies opting for this insurance policy. Hence increasing the premium rates of the policy due to protection it provides to the company’s data worth millions.
If the company works in the public sector and stores the data of citizens of the country like Phone numbers, Aadhar card, PAN card then they must purchase this insurance policy. Cyber insurance provides financial aid to the company and helps them get the hold of stolen data back.
It is recommended by insurance industry experts that even an individual with access to the internet should consider purchasing cyber insurance. Also, Purchasing the policy online is always a better option than purchasing it offline. It is cost-effective, the buyer can learn about the policy thoroughly and calculate the premium as well.