Posted on Oct 12, 2020
Organizations across all industries rely on technology to carry out their business operations. As a result, many have opened themselves up to unprecedented cybersecurity challenges, especially as data breaches become more commonplace.
A cyber liability insurance policy can help organizations fill in the gaps not covered by other security programs, helping them return to business-as-usual as quickly as possible after a breach has occurred. That said, cyber insurance policies are not one-size-fits-all, so it’s important to understand the various types of coverage available and the ways in which they can help your business recover from an attack.
Cyber liability insurance provides organizations with the help needed to prepare for, respond to, and recover from cyber threats and attacks. Essentially, cyber insurance helps to cover the financial losses that occur as a result of a data breach or similar cybersecurity event, including liability investigations or lawsuits. If your organization has access to personally identifiable information (PII), personal health information (PHI), or payment card information (PCI), then cyber liability is a necessity to ensure business continuity in the event of an attack.
Cyber liability insurance and data breach insurance offer many of the same benefits, with each providing a different level of coverage to your organization. Cyber liability insurance provides comprehensive coverage for larger businesses and typically consists of both first and third-party coverages. Data breach insurance specifically refers to first-party coverages related to a data breach or attack and aims to minimize costs and damages related to informing and supporting the affected parties.
Cyber liability insurance is a relatively new concept in cybersecurity that has emerged in recent decades. The level of coverage required is going to vary depending on the unique needs of your organization as well as the provider from which you are purchasing the insurance.
Most cyber insurance policies will include first and third-party coverage. Take a look at the various types of coverage that may be included in each:
First-party coverage helps organizations address expenses incurred as a direct result of a breach, such as cyber extortion costs. Examples of first-party liability insurance coverages include:
Third-party coverages help organizations defend against lawsuits and legal claims made by people or companies who were affected by a data breach. Examples of third-party liability insurance coverages include:
Cyber liability insurance should be used in conjunction with other types of business insurance, as not all types of risk are covered by these policies. Coverages that are not typically included in cyber liability insurance policies include:
There are a number of underwriting factors that insurance providers take into consideration when determining your organization’s risk, some of which include:
While cyber liability insurance can be a useful and necessary resource for organizations that have experienced a data breach or other cyber incident, it is not a catch-all solution and the effects of the breach are likely to remain for months, or even years, after the event has occurred. Instead, organizations should focus on the proactive, continuous management of cyber risks within their IT ecosystem.
SecurityScorecard provides a comprehensive view into a network so your organization can ensure that its entire supply chain is compliant with applicable regulations and actively working to protect critical information. IT teams can also use Security Ratings, which are letter-grade assessments of an organization’s cyberhealth that enable IT teams to drill down and remediate specific issues immediately, rather than waiting for them to become greater threats to security. Additionally, when your organization is able to clearly demonstrate its cybersecurity posture to insurance providers, they can more accurately assess the network and help avoid unnecessary costs or coverage that don’t apply to your organization’s needs.
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