What is cyber insurance?
Cyber insurance is a form of cover designed to protect your business from threats in the digital age, such as data breaches or malicious cyber hacks on work computer systems.
A business is responsible for its own cyber security, but in the event of a cyber attack, having the right insurance will mean you aren’t alone. Cyber cover can provide crucial support to help your business stay afloat.
So, how does cyber insurance work and how much cyber insurance do I need? Read our full FAQ guide for an introduction to this cover.
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What does cyber insurance cover?
In the event of a breach, security failure, illegal threat or cyber attack, most cyber insurance policies will cover the first-party and third-party financial and reputational costs if data or electronic systems have been lost, damaged, stolen or corrupted.
For the business involved – the first-party — cover includes the cost of:
- Investigating a cybercrime
- Recovering data lost in a security breach
- The restoration of computer systems
- Reputation management
- Extortion payments demanded by hackers
- Notification costs, in the case you are required to notify third parties affected.
Some cyber insurance policies also offer support with income loss if your business needs to close temporarily because of a cyber attack.
With Hiscox, this is available as part of optional cyber business interruption insurance, which may provide help with income loss. It could also pay a daily interruption benefit for 30 days.
Third-party coverages (that result from claims against you) include damages and settlements, and the cost of legally defending yourself against claims of a data breach. This might include a privacy investigation launched against your business by a regulator or government department.
At Hiscox, we can sometimes also cover your online liability for things like defamation claims, where these result from a hacker altering your online presence.
Cyber insurance can also cover crime costs – with Hiscox, this cover goes beyond cybercrime. If your business faces fraud by an employee, cyber insurance may help to pick up related costs.
Who needs cyber insurance?
If your business uses, sends or stores electronic data, you may benefit from cyber insurance. That data, whether it belongs to the business or is sensitive customer information, is vulnerable to cyber-attacks and data breaches; cyber insurance can help with the cost of recovery.
This is why cyber insurance can be an important part of small business insurance. It offers financial support if the worst happens.
How much does cyber insurance cost?
The cost of cyber insurance depends upon several factors, including the business’ annual revenue, the industry it functions within, the type of data held, and the level of network security. Certain sectors are more vulnerable to cybercrime and will therefore require a higher level of coverage.
For example, companies that hold a large number of personal records, such as in finance and healthcare, are at greater risk than a sector like catering, for example.
The best way to find out how much it would cost to cover your business is to run an online cyber and data insurance quote.
What are common cybercrimes?
Unfortunately, even some of the most tech-savvy individuals can fall victim to cybercrime. While there are numerous types of criminal activities occurring online, there are a few common cybercrimes to be aware of:
A form of malicious software that can install itself in your systems via phishing scams and by exploiting software vulnerabilities. Once installed, the attacker can spy on online activities and steal private data.
This a form of malware that attacks your computer system and encrypts data. The attacker will then demand a ransom payment in exchange for the return of the data. It’s worthwhile to formulate a data recovery plan as a precaution and maintain at least one backup of your data.
Cyber hacking is a term used for the partial or complete acquisition of a computer system or certain functions within it. There are various methods of doing so, but the aim is generally to access important data.
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