Businesses today face a range of cyber threats that can disrupt operations, compromise sensitive data, harm reputation, and cause significant financial losses. Cyber insurance has emerged as a critical safeguard in response, offering protection and peace of mind in the event of an attack.

This blog explores the importance of Cyber insurance through its key features and benefits as well as an example of a real-world cyber attack.

What is Cyber insurance?

Cyber insurance, sometimes also called Cyber Liability insurance or Cyber Risk insurance, is a specialised policy designed to protect businesses from internet-based and other risks relating to IT infrastructure and activities.

These policies typically cover costs associated with data breaches, ransomware attacks, network damage, and other cyber incidents.

Why does my business need Cyber insurance?

There are numerous benefits to Cyber insurance, and they can be loosely grouped into five main areas:

1. Financial protection

Cyber attacks can result in substantial financial losses due to business interruption, data recovery costs, legal fees, and regulatory fines. Cyber insurance helps mitigate these costs, ensuring that a single incident doesn’t cripple your business financially.

2. Legal and regulatory compliance

Your businesses may face legal challenges and regulatory scrutiny in the wake of a cyber attack. Cyber insurance can cover the costs of legal defence, settlements, and fines to help you navigate this.

3. Data recovery and restoration

Recovering lost or compromised data can be a costly and time-consuming process. Cyber insurance often includes coverage for data restoration, ensuring that your business can get back up and running quickly.

4. Reputation management

A cyber attack can damage your company’s reputation and erode customer trust. Many Cyber insurance policies provide resources for public relations efforts to manage and mitigate reputational harm.

5. Support services

Cyber insurance providers often offer access to a range of support services, including risk management support as well as incident response teams, forensic experts, and cybersecurity consultants. These professionals can help you effectively respond to and recover from a cyber attack.

Most insurers now provide a 24/7, 365-days-of-the-year incident response. This is a key thing to look out for when selecting the right coverage, because let’s face it: criminals don’t care if you’re on holiday or if it’s Christmas! If an attack was to happen, you can breathe a little easier knowing you’ve got the right people ready whenever you need them.

Cyber insurance in action: The WannaCry ransomware attack

The infamous WannaCry ransomware attack of May 2017 illustrates just how crucial Cyber insurance can be. It targeted computers running Microsoft Windows by encrypting data and demanding ransom payments in Bitcoin. The malware spread rapidly across networks by exploiting a vulnerability in the Windows operating system.

WannaCry affected over 200,000 computers in 150 countries, causing widespread disruption and billions of dollars in financial losses globally. Notable victims included Telefónica and German railway company Deutsche Bahn, as well as the NHS – which faced an estimated £92 million in disruption costs and IT upgrades. Hospitals had to cancel thousands of appointments and divert emergency patients, significantly impacting healthcare services. Many organisations also faced the daunting task of recovering encrypted data and restoring their systems, leading to additional costs and prolonged downtime.

Those with Cyber insurance were better positioned to handle the aftermath of the WannaCry attack. Their policies covered ransom payments, data recovery efforts, business interruption losses, and legal expenses. Additionally, access to expert support services enabled them to respond more effectively and minimise long-term damage.

Protect your business from cyber threats with RiskBox

We often see the headlines for the big names, but these threats affect micro businesses and SMEs in the same way and can be just as (if not more) disruptive. They’re also becoming even more sophisticated.

What if you were to accidentally click on a link from an unsuspecting email and malware eventually gained access to customer data and financial information? What if you were then locked out of your systems and ultimately couldn’t operate? What would a scenario like this mean for your business?

Investing in Cyber insurance isn’t just a smart financial decision – it’s a vital part of a comprehensive cybersecurity strategy. By safeguarding your business against the unpredictable nature of cyber threats, you can focus on what matters most: growing and succeeding in the digital age. Speak to RiskBox today to find the right policy for you.

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