As the use of internet space becomes popular in recent years, information (true and untrue), and data are distributed indiscriminately, the internet space can be said to be a high-risk environment. Unfortunately, many businesses need this cyberspace for effective business running and are therefore exposed to this high-risk environment hence the need for cyber insurance.
What is cyber insurance?
Cyber insurance is basically a type of insurance policy that protects businesses against internet and information technology-related risks. Simply put it protects businesses against risks associated with running their business online. These risks are usually not covered in most traditional business insurance.
What does cyber insurance cover
All businesses, small or big as long as they make use of cyberspace are at risk of cyber attack. With the increase in cyber-attacks and cyber crimes, most businesses do not know that they can be insured against such incidence. Cyber insurance offers the following coverage;
- Network security coverage
- Privacy liability coverage
- Media liability coverage
- Network Business Interruption Coverage
- Errors and Omissions Coverage
Network security coverage: if your insured business experiences network security failures such as data breaches, compromise of business email, ransomware, or malware infection, amongst others, network security coverage cover legal expenses, data restoration, public relations, investigation, notifying customers, and payment and negotiation cost as a result of these failures.
Network security coverage is important to be included in your cyber insurance policy.
Privacy liability coverage: companies have private information of their customers and employees stored in cyberspace. If a data breach should occur and this information is exposed, the business would be at risk of liability.
Privacy liability coverage protects your business against liability as a result of private data infringement through cyber attacks. It covers costs like legal expenses (cost of getting a lawyer, fine or penalty), settlement after a breach has occurred, it also covers the cost of investigations.
Media liability coverage: media liability coverage protects you against violation of intellectual property. This coverage extends to both online and printed adverts and also posts made on social media.
Note that it does not cover patent violation.
Network business interruption coverage: technology is prone to developing faults from time to time. If your business depends on technology to operate effectively, your business is prone to the risk of Cyber technology risks.
This coverage covers loss, extra expenses, and fixed costs as a result of network failures. It also covers human errors and system errors and cyber attacks as a result of these errors.
Errors and omission coverage: should your business breach a contract, be guilty of neglect, experience performance failures, errors and omission coverage covers for costs that may be incurred such as basic professional services (engineer, lawyer, doctor, etc) needed, software services or consulting services.
Benefits of cyber insurance
- It ensures proper funding of business after a loss has occurred due to a cyber attack
- It prevents the business from closing up due to the effect of cyber attack
- It ensures proper distribution of available coverage funds so that one area is not enriched and the other lacking.
Why is cyber Insurance important
Although most cyber security vendors are nice improving on their technology, it is impossible to create at least an almost perfectly secured cyberspace because:
- Customers are not in the know of beneficial features of technical solutions
- Security providers have listed funds to research security techniques
- Limited available technical solutions
- The free-riding problem from network providers feeding on the security of their customers
- Insufficient protective regulations protecting Cyberspace.
With these issues listed and so much more, we cannot overemphasize the need for cyber insurance as an extra security measure to protect cyberspace.