Cyber Protection Insurance FAQ

Cyber insurance is designed for your company to mitigate the risk exposure by offsetting the costs involved with your business recovery after a cyber-related security breach or similar events. Coverage may include crisis management cost (forensic cost, restoration cost, notification cost, and PR cost), business losses or defence cost, and payments if there is a third party claim.

SMEs face higher risks because attackers perceive SMEs as easier targets with fewer resources and budget to devote to cybersecurity. With cyber threats getting more sophisticated, even with robust security controls, data breaches may still occur. Often, the consequence and recovery costs of a data breach lead to not only adverse business financial impact, but also lasting reputation damage. With cyber insurance, you get a more holistic security plan and an additional layer of protection against a myriad of malicious activities.

Coverage typically includes the costs and expenses below:

• Crisis management cost — Data forensic cost, breach consultation services cost, restoration cost, breach response services cost and PR cost (including personal reputation)
• Business interruption loss
• Network extortion cost
• Third party liability claims

Everyone in the organisation plays a part in cybersecurity but the C-Suites and designated data protection managers may need to answer to regulators or stakeholders in the event of a cyber-breach.  It is imperative to have a robust cybersecurity and mitigation plan (including insurance) to tackle the regulatory compliance requirements and safeguard against any potential financial losses.

Cyber insurance is currently not mandatory, however it is definitely better to take a proactive cybersecurity stance and be prepared. Businesses that have cyber insurance have an advantage over those that do not when major cybersecurity incidents occur. Cyber Insurance can help reduce the residual risks which IT solutions are unable to fully avoid, such as human errors or hacker attacks.

Cyber incidents fall under most of insurance products’ exclusion section, even with extensions, the restricted coverage may not be able to provide a comprehensive incident response support.