The National Cyber Security Centre reported a significant increase in cyber-attacks during 2023, including a 935% increase in “double-extortion” ransomware attacks.
In the current climate, the survival of millions of businesses survival hangs in the balance. Companies are bound by data privacy regulations and are suffocated by GDPR.
Firms that suffer a data breach are not affected by GDPR penalties, but your obligated to inform affected parties. Subsequently, businesses lose customers and revenue.
This is where cyber insurance can save your business.
What is Cyber Insurance?
All good cyber insurance packages offer complete first and third-party cover. This helps to mitigate the financial damage of a data breach and navigate the tricky path in the aftermath.
Cyber insurers also cover all the costs associated with investigating the breach. Policies also help you to repair the damage, pay for data recovery, and pay for the cost of fixing any broken systems.
If you decide that it is the best path, most insurers will pay the cybercriminals extortion fees to get any lost data back.
Finally, and arguably most importantly, cyber insurance covers the cost of building your business back up to repair the damage to your reputation. Ordinarily, this would require a significant investment most businesses do not have the clout for.
These are not the only costs your business may suffer from because of cyber-attacks. Your customers may take you to civil court because losing their data to a cybercrime constitutes a breach of GDPR legislation.
Therefore, cyber insurers will pay your legal fees for defending your business and provide the funds for any settlements you may make with your customers.
How Much Does Cyber Insurance Cost?
Determining exactly how much your cyber insurance will cost is tricky because it will be different for every business. Insurers will give you a quote based on your business size, the vulnerability of its industry, and the measures you have in place to prevent cyber-attacks. It is a good idea to shop around, seeking out the best cover for your business.
A study by the business insurance firm AdvisorSmith found that, in 2019, US companies were paying an average of $1,485 a year. That’s a good investment considering the average cyber insurance policy covers you for $1,000,000 of liability.
However, the crunch is that excess on these insurance policies is high. Businesses will be expected to pay around $10,000 from their own pocket. If the settlement payment is immediately, then you won’t need to find $10,000 from your own pocket before the wheels of recovery are set in motion. If not, your business could be frozen until your insurance company transfers the money to your account.
Is Cyber Insurance Worth the Investment?
Before deciding whether you’re going to invest in cyber insurance, you need to compare the costs of being covered and the potential cost of a data breach.
The risk clearly outweighs the cost of a policy. According to IBM, the average cost of a data breach was $4.24 million by the end of 2023. If your staff work remotely, the risk is even higher.
Faced with these striking statistics, it’s hard to imagine a circumstance where cyber insurance would not be a good investment. If you’re still not sure, contact an IT support service and quiz them about their accountability and responsibility for data.