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Why your Company needs Cyber Insurance

As cybercrime continues to surge, security leaders must understand that there is no such thing as a fool-proof, impenetrable secure environment. No business is immune to cybersecurity risk, and the cost of the average data breach is steadily rising.

Cyber insurance is to cover your company in the event of a cyberattack or data breach. Your organization completes a long application form that shows that you have cybersecurity measures in place. In the event of a data breach or ransomware, cyber insurance helps companies recover from data loss due to a breach or other cyberattack.

Cyber insurance companies have been tightening their underwriting guidelines and the cyber insurance application asks for a lot more details for the risk involved. Organizations looking for cybersecurity insurance need to be prepared for a more rigorous underwriting process. The cyber insurance market has progressed to a critical requirement for enterprise risk management.

What does Cyber Insurance Cover?

Your company’s cyber insurance coverage will depend on the type of policy you get. The options available are first and third-party policies. First-party coverage protects against losses. These losses may include payment for cyber extortion, loss of business, or loss of digital assets. Third-party coverage provides protection for companies that manage systems, networks or software for other organizations’ data.

When the COVID-19 pandemic hit, employees went from working in an office where cybersecurity was protected by firewalls to working remotely from home. Cybercriminals took advantage of these vulnerabilities with phishing attacks that downloaded malware. Cyber insurance was there to cover cyberattacks, big and small. Since all cyber insurance policies are different, it is important to read the policy closely to ensure that your remote workers are covered.

Why it is Important to Have Cyber Insurance

According to a report by IBM and the Ponemon Institute, the average cost of a data breach in 2020 increased by 6.4% from the previous year to $3.86 million.  Data breaches and security incidents are becoming increasing costly and more frequent.

These breaches are the result of cyberattacks where cybercriminals gain unauthorized access to a network system and steal the sensitive and financial data of the customers or users.

Both SMB’s and enterprise organizations can be hit by cyberattacks.  When an organization is the victim of a ransomware attack, the consequences for the business may include loss of business, the cost of the investigation and resolution, loss of reputation and system downtime.

Call your insurance provider to find out what your policy covers.  Reach out to us at 416-874-0550 if you do not have cybersecurity insurance.

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