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Do I need cyber insurance?

When asking Do I need cyber insurance? The woman is now holding a green shield with a check mark implying yes and I now have coverage? Who creates these info graphics?

The year is 2020, and in the climate today, we all must take risk management seriously. Cybercrime is rampant, and we are beginning to realize how important it is to have some manner of insurance to protect our business. Cybercrime often would include any digital or internet-based attack that can disrupt your business or compromise your data. 

The thing that kept me awake at night (as NATO military commander) was cybersecurity. Cybersecurity proceeds from the highest levels of our national interest … through our medical, our educational, to our personal finance (systems).

Admiral James Stavridis, Ret. Former-NATO Commander

A non-inclusive list might include Denial of Service (DoS) attacks, phishing scams, ransomware, and viruses. It’s not uncommon to see insurance policy renewals specifically exclude cyber events from coverage. The consequences can be severe. Fines, penalties, loss of customer confidence and liability lawsuits can permanently shut down your business.

The severe consequences of cybercrime now have businesses exploring cyber insurance policies in hopes of protecting themselves against financial ruin. 

Do I need cyber insurance? Yes.

Insurance firms trying to write policies, in turn, face a lot of unknowns, which means coverage will differ dramatically between insurers, and there may be areas you’re left exposed to considerable risk. Some policies may create requirements and security standards that you must meet before an event is considered a covered loss.

  • How would you handle those requirements internally to keep your company in compliance?
  • If you had no choice but to pay the ransom, would your policy cover the payout?

There are a lot of weeds to get into when looking at cyber insurance; you must recognize the complexity of the issues. Cyber insurance has a lot of moving parts, so you should be working closely with your IT provider about capabilities and be transparent with your providers. 

Cyber insurance doesn’t absolve you of the ongoing need to be diligent about network and data security. 

A managed service provider like Demand ITS can help you learn more about what you can do to keep your business safe. 

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