A simple definition of cyber insurance is essentially a contract between an insurer and a company to protect against losses that are related to computer- or network-based incidents, also known as cyber-attacks.
Cyber-attacks are illegal attempts to access to organizations’ data or to disrupt their operations for criminal, political or simply for mischief. Millions of attacks are launched at firms every day, and some of them actually succeed in breaching companies’ defenses and wreak havoc.
Cyber insurance – also known as cyber-liability insurance – is an insurance policy that helps to protect organizations from the fallout of cyberattacks and hacking threats. Having a cyber-insurance policy can help minimize business disruption during a cyber-incident and its aftermath, as well as potentially covering the financial cost of some elements of dealing with the attack and recovering from it.
Why do I need Cyber Insurance?
An organization’s ability to deal with any kind of risk is often what gives it a competitive advantage over other organizations in the same sector. Globally there is an ever greater reliance on technology. The Covid-19 pandemic has further accelerated the shift towards technology to cope with our volatile environment.
Cyber security and information protection can be challenging for companies of all sizes. Many people believe that only large-scale industries, such as banks and financial institutions, need cyber security insurance. However, with growing governance issues, policies and law enforcements (eg. PDPA and others), any electronic information such as your name, email, contact number, financial records, medical records, payment information, government documentation, etc., stored in your devices could be targeted. Today’s businesses rely on the internet for services such as online marketing, administrative functions, inventory management, credit card processing, and distribution controls. Any intrusion that disrupts delivery of these services can lead to brand and reputational damage, regulatory scrutiny, stakeholder dissatisfaction, and financial losses.
The standout benefits of having cyber insurance are access to highly experienced experts to nullify the threat effectively and as quickly as possible. This will help mitigate disastrous consequences and ultimately bring back the organization to business as usual.
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