The short answer? Yes, cybersecurity insurance is worth it in today’s online world. The cost and frequency of cybercrime have both skyrocketed. Cybercrime is projected to cost the world $10.5 trillion per year by 2025, and malware attacks specifically increased by 358% in 2020.
But not all cybersecurity policies work the same way. You want to make sure you’re paying for the right coverage for your business. Let’s discuss what a good cybersecurity plan should include and how to make the best choice for your company’s finances and reputation.
Cybersecurity insurance works similarly to any other kind of business insurance. You pay a monthly fee in return for compensation in the event of an unforeseen catastrophe—in this case, a successful cyberattack. As of 2020, the average data breach cost victims $3.86 million. Having coverage for this kind of event can save your business from taking a devastating loss.
Cybersecurity insurance can help you recover financially from a cyberattack. But to recover your data, you need a comprehensive BCDR solution.
Cybersecurity coverage varies from insurance provider to provider. You want to look carefully over your plan before you accept. Your business’ unique needs will vary according to your industry and your business size, but, at a bare minimum, your policy should cover the following:
- Continuous risk assessment and underwriting
- Data destruction or theft
- Extortion demands
- Crisis management
- Legal fees associated with the breach
- Regulatory fines and penalties
In addition to insuring your business, you should consider personal cybersecurity insurance for yourself as well. A number of home insurance providers now offer cybersecurity policies—covering identity theft, cyber extortions, and cyber attacks. This is an especially good idea for executives who might become personal targets in larger-scale attacks on their businesses.
The threats businesses face have changed, as have their potential liabilities. Cybercrime—from identity theft to high-profile ransomware attacks—isn’t going to get any better, and it’s time for businesses to protect themselves and their clients. State-of-the-art cybersecurity measures and BCDR (Business Continuity and Disaster Recovery) plans can protect your systems and data in a cyberattack. But those measures can fail, and cybersecurity insurance is the only financial protection you have in such an attack.
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