Do I Need a Cyber Insurance Policy

Cybercrime is very rampant these days. Daily, news reports are coming off more and more crime, fraud, and theft relating to information on the internet. In case, if you are new to cyber insurance, this implies protecting the individual or the company financially against cyber-attacks such as Phishing, Identity Theft, ID Theft, Email Spoofing, etc.

It has gained immense importance in recent years, due to the proliferation of hackers, cyber thieves, etc. One of the most common types of cyber fraud is in the field of internet banking. Banking customers often get phishing emails, from fake websites, which resemble original banking sites. Then customers are prompted to enter their username and password, which gives hackers access to the bank account, and consequently, crores of money is swindled by them.

In order to counter this, banks have started an information campaign. This, however, is applicable at the individual level. At the organizational level, many firms are opting for Cyber Fraud Insurance. Using this technique, the firm is insured against cyber fraud, by using the services of world-class experts. Now, let us list the advantages of cyber insurance, which have made it so popular. 

1. The gap between the current requirements and traditional coverage is greatly reduced

It has been observed that traditional insurance, which is done for commercial liability, is applicable for risk, which comes out of a tangible property, which implies the server, on which data is stored. Conventional policies do not cover the first-party breach costs for notification. This results in a huge gap in the organization’s digital assets coverage, which exposes them to the full costs of an event leading to loss of data. Consequently, cyber insurance is designed to fulfill this gap and act as insurance against cybercrime. To put it into simpler language, cyber insurance provides coverage for:

• Loss of data.
• Costs of remedy to respond to a breach of data.
• Legal penalties and fines and regulations.

2. Covering the expenses of a data breach

Data breaches are very difficult to estimate and make a budget. The scope, size, and complexity of data breaches vary tremendously. Breach of information is very expensive, due to very strict requirements for notification, the chances of fines from different regulatory authorities, specialized monitoring for medical identity and recovery services.

It has been observed that cyber insurance assists individuals cope with unwarranted expenses, and handle some of the costs associated with loss of data. The most common form of loss of data consists of Forensic Investigation, Fees for litigation, All types of communication ( Call Centers, Notification Letters, Regulatory Services ), Data Analysis, Monitoring of Identity ( Credit Monitoring ), Public Relations, Services related to identity restoration, Legal Settlements and Regulatory Fines.

3. Delivering resources for responding to a data breach

In case, there is a loss of data or a very staggering data breach, there are plenty of carriers that offer a panel of approved vendors. This consists of a lawyer, who gives guidance to the insured with the help of the breach response process.