Between 2014 and 2020, the average data breach cost increased by 10%.
What makes data breach damaging is not the act itself but expenses like regulatory fines, legal costs, and hiring security to alleviate data breach damage.
To keep financial losses under control, a risk management strategy is necessary. And what makes a critical part of your risk strategy is cyber insurance. Read on to know why you need to have a cyber insurance policy in place.
1. Your staff rely on computers to get their jobs done
If you have devices accessing the internet on and off your network, you’re prone to cybersecurity risk.
For these reasons, cyber insurance is a must-have as part of your cybersecurity risk management plan. It won’t make your organization foolproof against cyberattacks, but you’ll surely have strong financial support in unfortunate circumstances.
2. Your company handles/stores personal data from clients and customers
Cybercriminals capitalize on personal information to conduct data breaches and related cyber-attacks. Personal information comprises identity details such as name, address, email address, or telephone.
If your organization uses or keeps the identity information of your clients/customers, you must be a potential target for hackers.
According to Privacy Act, it is your responsibility to ensure the safety of your clientele’s personal information. With cyber insurance in place, you’ll make sure it is stored and handled with the topmost sensitivity.
3. You use cloud services
If your organization operates on cloud infrastructure, you need cyber insurance. Here’s why:
- Research shows that 2.7% of files shared in the cloud are publicly accessible.
- 44.4% of sensitive data uploaded to the cloud include confidential information such as business plans and financial records.
- Personally identifiable information (PII) comprises 70% of data stored in the cloud.
Cloud computing should be leveraged for file sharing and collaboration without a threat of data breach. For that reason, it should go hand-in-hand with proper governance and cyber insurance.
4. Your business couldn’t financially survive a cyber attack
Cyber attacks pose a serious financial risk to your organization. Investing in cyber insurance would ensure that you get coverage in events such as lost revenue, customer churn, privacy fines, and legal expenses.
That said, you might be having a public liability, management liability, or similar business insurance policy. However, that doesn’t necessarily mean you’ll have coverage for cyber liabilities like business interruption, loss of data, legal expenses, and data recovery.
Have separate cyber insurance to get exclusive coverage on cyberattack incidents.