What would happen if one day you arrived at your office to find your entire network paralysed by a ransomware attack? Systems are locked, your data held hostage, and the attackers demand a ransom. All your effort and work seem to vanish in an instant. Such situations are increasingly common in a digitalised world where cyber threats evolve at an alarming pace. That is why digital security has become an unavoidable priority. This is where cyber insurance plays a crucial role, acting as a safety net against the damages caused by these types of crimes.
To face this distressing situation and provide peace of mind, at Ambler we offer expert advice on the best cyber insurance policies to protect your business from such threats. Let’s take a look at what this coverage includes, the types available, and how you can choose the right one for you. Let’s get started!
What does cyber insurance cover?
Cyber insurance is designed to protect a company against the consequences of cyber incidents. Here are some of the most common coverages:
Damage to technological infrastructure
Servers, networks, and digital assets affected by malware, ransomware, or technical faults are covered by cyber insurance. For instance, if an attack disables your main server, the insurance will cover the costs of reinstalling and configuring the system to restore operations.
Liability for data breaches
It also covers liability for data breaches, including legal costs, regulatory fines, and compensation for clients or employees whose sensitive information has been exposed.
Coverage for incident management
Imagine a cyberattack that completely deletes your entire customer database. In such a case, the cyber insurance would cover expenses related to notifying affected individuals, hiring cybersecurity experts to investigate the incident, and managing crisis communications to mitigate reputational damage.
Claims for third-party damages
In the event of legal claims and compensations to clients or partners affected by a cyberattack, the insurance will cover all associated costs. For example, if a client loses money due to a security breach on your platform, this coverage can handle the compensation.
Loss of income
Often, the severity of the attack forces the business to halt its operations. Once again, the cyber insurance covers lost income during system downtime, as well as additional costs to restore operations as quickly as possible.
Types of Cyber Insurance Available
Cyber insurance is not a one-size-fits-all product. Instead, there are different types available depending on whether it is for a company or an individual:
For businesses
Whether your company is small, medium, or large, cyber insurance is designed to cover all sizes. It adapts to the specific needs of various sectors such as finance, healthcare, or technology, where cyber risks can differ significantly. Additionally, it offers comprehensive protection including data loss, civil liability for damages caused to third parties, and recovery of systems affected by attacks or errors.
In the case of technology companies, for example, coverage extends to protect the infrastructure supporting digital operations, while in the financial sector, the focus is on safeguarding sensitive data and ensuring business continuity.
For individuals
On the other hand, cyber insurance for individuals focuses on personal protection, covering issues such as online fraud, identity theft, or damage to personal devices. It also provides additional services like monitoring online activity to prevent potential attacks.
How to choose the right cyber insurance
Choosing the right cyber insurance can make the difference between successfully overcoming an incident or facing serious consequences. Therefore, consider the following factors:
Company size and activity
Small businesses typically need more basic coverage focused on protecting essential systems within limited budgets, while large corporations require comprehensive solutions covering multiple layers of protection for complex systems and sensitive data.
Type of data
The nature of the data handled by a company is a key factor: those dealing with financial information or health data, such as clinics or banks, face higher risks due to the sensitivity of the information. Therefore, they require specific coverage that ensures protection against data breaches and compliance with legal regulations.
System vulnerability
Before purchasing cyber insurance, assess how exposed your technological infrastructure is to potential threats. Review the systems’ update status, existing security protocols, and incident response capabilities. Identifying vulnerabilities will help you select a policy that covers those critical areas.
History of cyber incidents
If your business has faced attacks in the past, it may be necessary to choose insurance that places greater emphasis on prevention and crisis management. Insurers might also adjust the policy terms based on this history, offering additional services such as audits or training to minimise future risks.
What does a cyber insurance policy not cover?
It is important to understand the limitations of cyber insurance to avoid surprises. Below are some common exclusions:
Gross negligence
If an organisation fails to implement basic security measures, such as keeping operating systems, antivirus software, and other software up to date, it may face serious consequences. Negligence in this regard can be grounds for the insurer to deny coverage of the incident, as the attack is considered preventable with minimal effort.
Illegal activities
Any activity that violates the law is excluded from cyber insurance coverage. Examples include the use of unauthorized software, fraudulent actions, or any conduct that compromises the legality of the company’s operations. Insurers will not be held liable for incidents arising from illegal behaviour.
Undeclared systems
Cyber insurance policies require full disclosure of all systems and technologies to be protected. If a company uses technology not declared in the policy, that part of the infrastructure will be uninsured. For example, if a new server or system is acquired but not reported to the insurer, any incident involving it will not be covered.
Why a cyber insurance policy does not replace a security strategy?
While cyber insurance acts as a financial safety net in the event of an incident, it cannot replace the importance of having a comprehensive security strategy. Best practices to protect your organisation include implementing firewalls and antivirus systems.
Another crucial measure is the ongoing training of employees in cybersecurity. Cyberattacks often exploit human error, so educating staff on identifying fraudulent emails, managing passwords securely, and preventing risks significantly reduces the likelihood of incidents.
Finally, conducting regular system audits helps identify vulnerabilities before they can be exploited. This ensures that systems remain updated and aligned with best security practices. While cyber insurance provides peace of mind, prevention remains your first line of defence against digital threats.
The future of your company starts with strong cyber protection.
Protecting your company against cyber risks is an investment in its future. Having the right cyber insurance, combined with a solid security strategy, can make all the difference in the event of a cyberattack. Additionally, you can rely on Ambler for professional advice from an insurance brokerage with over 34 years of experience, helping you manage risk with confidence.
We offer cyber insurance where we work closely with each of our clients to identify risks, design tailored solutions, and provide the support they need. Ready to protect your company? Contact us and let’s start safeguarding what you have built through your hard work.
