The importance of cyber insurance within businesses

With the recent increase in Cyber security threats towards businesses, it is crucial to have Cyber security Insurance. Data breaches have resulted in significant fines, such as software and legal fees in the last few years. This isn’t only an issue that large organisations face; many small to medium-sized businesses are susceptible to cyber attacks, increasing the importance of cyber insurance.

What is cyber insurance?

Cyber Insurance, also known as cyber risk and cyber liability insurance, is a way to cover and protect your business from cyber threats; these threats can come in many forms, such as data breaches and malicious attacks through malware and viruses.

Businesses are responsible for their own Cyber security and cyber insurance therefore, it is a critical business practice to obtain a form of cyber insurance through a trusted provider.

Having cyber insurance means in that in the event of a cyber attack on your business, you won’t be alone when it comes to help. This is done by covering your business's liability through data breaches which gain access to sensitive customer information such as credit cards, account numbers and IDs.

Cyber insurance covers many cyber security threats, such as:

Extortion

Cyber Extortion is now one of the most common forms of cyber security threats that many businesses face. This usually comes in the form of ransomware, where all your documents get locked with the demand that you pay to regain access to your files through the form of cryptocurrency. Extortion can also come through the form of blackmail with sensitive data being used against you for a sum price. Most types of cyber insurance cover these two types of extortion.

System attacks

In many cases, computers that already have antivirus are still vulnerable to attacks, malware can still find its way onto your devices. Cyber Insurance covers any equipment costs that are damaged through malware such as equipment repairs and replacements.

Identity theft

When cyberattacks occur, attackers often want access to your personal information such as your name, address, national insurance number, phone number and email address. If hackers get access to this information, they will attempt to sell it off online putting your personal information at risk. In many cases a good cyber insurance policy will help your business get back onto its feet after an attack.

Cyber Essentials insurance

In a business environment where cyber threats are constantly evolving, the help of a Cyber Essentials Accreditation can provide your business with insurance should something cyber-related go wrong. Managing complex cyber incidents such as ransomware attacks and data breaches may require in-depth technical IT knowledge. Cyber insurance will not instantly solve all cyber security issues and will not prevent cyber attacks. Cyber Insurance will provide coverage after an attack has taken place.

Before considering any cyber insurance, you can help protect your organisation by ensuring you have fundamental cyber security safeguards in place, such as those certified by Cyber Essentials and Cyber Essentials plus. This is done through IT Consultancy, Texaport is Gold Standard IASME (Information Assurance for SMEs) and NCSC Cyber Essentials Plus accredited. This enables us to support your business to achieve the UK Government-backed Cyber Essentials and Cyber Essentials Plus accreditation training your team from within.

The importance of cyber insurance

Lloyds bank in October of 2022 found problems within its IT infrastructure causing them to take some of their system offline. For a company that must be online 24/7 with transactions around the clock any time lost can cause huge amounts of cash losses. For situations like these Lloyds have cyber insurance in place to deal with the lost costs during their time offline.

With the rising prices of cyber insurance, it can be hard to decide if this is a service your business may want to invest in. In many cases, when a ransomware attack takes place the attacker may demand for large lump sum of money to unblock your files and allow you to regain access to your systems. When compared to the price of cyber insurance this can be a favourable service as it is normally much less than what attackers ask for. Depending on the size of your business attackers may ask as often millions of pounds for you to regain access to your system.

The cost of cyber insurance 

Cyber insurance can help your business get back up on its feet after a cyber attack. The global cyber insurance market is likely to grow from 12bn worth of annual premiums today to 60bn in the next five to ten years as threats are becoming more and more common.

With this predicted cost of damages and the daily increased risks of cyber-attacks causing expensive damages to businesses worldwide it would be recommended to implement cyber insurance to your business as the cost outweighs the potential damages that your business may face.

In many cases it is hard to find an exact estimate for how much cyber insurance will cost as it ranges from business to business depending on what coverage you are looking for. Yearly Cyber-insurance on average can cost around £500-5000, with some packages going over this threshold if they are protecting multi-million dollar businesses.

Although one thing is certain, it is safe to say that depending on how much your package costs and your business needs, it is recommended that your business invests in Cyber insurance to cover any damages you may face through cyber attacks. Implementing cyber insurance as a form of risk management for any business is important if you want to operate safely with the increasing number of cyber-attacks every year.

At Texaport, we understand the importance of these advancements, and we work with our clients to put a reliable system in place to improve their business efficiency. Our team has a wide range of IT knowledge and remains acquainted with the movements in the IT industry. Find out more here.