Cyber insurance covers losses related to the loss or damage to IT networks and systems.
This page will provide information about why cyber insurance is important for businesses, what a policy typically covers, how to purchase cyber insurance, how businesses can manage cyber risks and the actions taken by government to help businesses protect themselves.
Cyber insurance is important.
It is probable that your business will depend on IT infrastructure at some point. If you do, your business will be at risk of interruptions, income loss, damage management, repair and reputational damage.
Existing insurance policies, such as professional indemnity, commercial property or business interruption insurance, may not provide sufficient protection against cyber risks. However, companies are increasingly purchasing cyber insurance policies to complement their existing insurance plans, especially if they:
Secure customer information such as names, addresses and banking information
To conduct their business, they heavily rely on websites and IT systems
As a matter of routine, you will need to process your payment card information
What is it covering?
Cyber insurance covers losses due to the loss or damage to IT networks and systems. When faced with regulatory enforcement or reputational damage, policies often include substantial assistance in managing the incident.
Cyber risks generally fall under the first and third-party categories. These types of risks can be covered by insurance products.
- First-party insurance protects your company’s assets. This could include:
- Digital assets, such as software programs or data, can be lost or damaged.
- Network downtime can cause business interruption
- Cyber exhortation: Third parties may threaten to release data or damage it if they don’t get their money
- Notification expenses for customers when they are required to notify the authorities of a privacy or security breach
- A breach of data that causes the loss of intellectual property, customers, or reputational damage can cause reputational damage
- Digital Asset Theft through equipment theft or electronic theft.
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Insurance for third-party assets covers your customers and typically other people’s assets. This could include:
- Security breaches and privacy, as well as the investigation, defense costs, and civil damages that go along with them
- Multimedia liability To cover civil damages, investigation costs, defence costs, and civil damages arising out of defamation or breach of privacy, or negligence in publication in digital or print media
Third-party data loss, including compensation for customers who are denied access and software or system failure
Cyber risk insurance can be purchased directly from an insurer, or through a broker. Through the British Insurance Brokers Association (BIBA), you can find cyber insurance brokers.
SME policies are usually available with coverage limits between PS100k to PS5million, but higher amounts are available for companies facing complex cyber risks.