Reasons Why Cyber Insurance Is a Mandatory Cyber Security Tool
Below are a few key reasons why Cyber insurance is considered mandatory cyber security tool for your business.
Increase in the Frequency and Severity of Cyber Attacks
According to a report by Cybersecurity Ventures, the cost of cybercrime is projected to reach globally $10.5 trillion annually by end of 2023. This highlights the need for businesses to have a plan in place to protect themselves against the financial losses that can result from a cyber attack. Cyber attacks are becoming more sophisticated and are targeting small and large organizations alike, it's no longer a question if an organisation will be targeted, but, when?
Potential Damage due to Cyber Attacks
Another important factor is the potential damage that can be caused by a successful cyber attack. A data breach can result in the loss of sensitive information, financial losses, and damage to a company's reputation. These can have a devastating impact on a business, potentially leading to bankruptcy.
In addition, a data breach can also result in legal and regulatory fines, as well as the cost of notifying affected individuals and providing credit monitoring services. A network failure can disrupt business operations, resulting in lost revenue and damage to a company's reputation. These risks are not covered by traditional forms of insurance, making cyber insurance a mandatory cybersecurity tool and a necessary step for businesses to protect themselves against these threats.
Furthermore, many industry regulators and standard bodies have made it mandatory to have cyber insurance for organisation's that handle sensitive information. For example, DISHA (Digital Information Security in Healthcare Act) for healthcare organisations, PCI DSS (Payment Card Industry Data Security Standard) for an organization that handles credit card information, and many more.
This further emphasizes the importance of having cyber insurance as mandatory cybersecurity tool for businesses of all sizes. This is to ensure that companies are well-equipped to deal with the aftermath of a cyber-attack and to ensure that they can continue to operate in the event of a cyber incident.
Features and Importance of Cyber Insurance
Cyber insurance can also provide organisations with access to a wide range of resources, including incident response teams and forensic experts, which can help organisationsquickly and effectively respond to a cyber attack. Additionally, many cyber insurance policies include coverage for public relations and crisis management expenses, which can help organisations to mitigate the damage to their reputation in the event of a cyber attack.
When purchasing cyber insurance as a mandatory cybersecurity tool, it's important for companies to consider the specific risks they face and to select a policy that provides appropriate coverage. Some policies may provide coverage for a wide range of potential losses, while others may be more narrowly focused. Organisations need to work with a trusted insurance broker to identify their specific needs and to select a policy that provides the appropriate level of protection.
Cyber insurance as a mandatory cybersecurity tool is becoming increasingly necessary due to the increasing frequency and severity of cyber attacks. The potential damage caused by a successful attack, and the lack of coverage provided by traditional forms of insurance, make it necessary for businesses to protect themselves against the financial losses that can result from a cyber attack. With more and more regulatory bodies making it mandatory, it’s important for companies to consider purchasing cyber insurance coverage to ensure their business is protected against cyber threats.