Cyber liability and crime insurance are like a safety net for businesses, but they're not perfect. They can help you recover from a cyberattack, but there are some key things you need to know about these policies before you buy one.
First, they don't cover everything. For example, most policies don't cover intellectual property losses or reputational damage. So, if a hacker steals your trade secrets or your customers' personal information, you may still be out of luck.
Second, they may have sub-limits or exclusions, which means there are certain types of losses that are only covered up to a certain amount, or not covered at all. For example, a policy may have a sub-limit on ransomware payments, or it may exclude coverage for certain types of cyberattacks.
Third, cyber risks are constantly evolving, and insurance companies may not be able to keep up. New threats are emerging all the time, and it can take time for insurance companies to update their policies. This means that there may be some cyber risks that are not covered by your policy.
[RELATED: The Cyber Insurance Landscape Has Grown More Complicated]
Finally, insurance can't protect your brand reputation or customer base. Even if you have adequate cyber insurance coverage, a cyberattack can still damage your reputation and cause you to lose customers.
Even with above limitations, cyber liability and crime insurance are like a fire extinguisher: you hope you never need it, but you're glad it's there if you do. But before you buy a policy, there are a few things you need to keep in mind.
First, not all cyberattacks are created equal. Some are more likely to target businesses in your industry, while others are more likely to target businesses of your size. That's why it's important to understand the specific cyber risks that your business faces. This will help you to purchase the right type of insurance coverage and to negotiate exclusions.
Second, you'll need to work with your cybersecurity experts. They can help you to identify the proper limit of coverage for your business and to negotiate exclusions. They can also help you to implement strong cybersecurity measures, which will reduce your risk of being attacked in the first place.
Finally, think of cyber liability insurance as a company-wide issue. It's not just something that the IT department needs to worry about; everyone in the company needs to be aware of the risks and know what to do if there is an attack.
However, businesses should not rely on cyber liability and crime insurance as their sole means of protecting themselves from cyber risks. Businesses should also invest in a comprehensive cybersecurity program that includes measures to prevent cyberattacks, detect attacks when they do occur, and respond to attacks quickly and effectively.
A good cybersecurity program will help you to:
- Reduce the risk of a cyberattack. By implementing strong security measures, you can make your business a less attractive target for attackers.
- Mitigate the damage if an attack does occur. Even if you are attacked, a good cybersecurity program can help to minimize the damage. For example, you may be able to recover your data more quickly or prevent your customers' personal information from being leaked.
Here are some tips for developing a cybersecurity program:
- Focus on your most important assets. Not all assets are created equal. Some assets, such as customer data and intellectual property, are more valuable to your business than others. Focus your security efforts on protecting the assets that are most important to your business.
- Make cybersecurity an ongoing process. Cybersecurity is not a one-time fix. There are new threats emerging all the time, so you need to continuously improve your security posture.
- Get your executives on board. Cybersecurity should be a top priority for all executives in your company. Make sure that your C-suite and board understand the risks and are committed to investing in cybersecurity.
- Make small changes regularly. You don't need to make major overhauls to your security posture to make significant improvements. Instead, focus on making small changes on a regular basis.
[RELATED: 6 Consensus Principles for Cyber Risk Governance: A Roadmap for Boards]
