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Specialized insurance against cyber risks
OVERVIEW OF CYBER RISK INSURANCE
No computer network is immune to cyber-attack, as hackers can target any network to gain access to confidential data and generate far more serious damage. Fraudulent transactions, identity theft, defamation and extortion are just some of the problems caused by cyber-risks. We've often heard of confidential information being divulged, or personal data being published on social media, invading the privacy of others.
In view of such risks and the impact they can have on structures, cyber-risk insurance is urgently needed to cover data restoration and other related costs.
The importance of cyber risk insurance
All it takes is for a company to fall victim to a computer intrusion to jeopardize its security and undermine customer confidence. Entrepreneurs are generally not sufficiently aware of such a danger, and think that the steps taken by IT technicians are sufficient to prevent all attacks, but this is just a delusion. They mistakenly think that theft and criminal activity protection is enough to adequately cover them against cyber-risks. Unfortunately, this is a misconception that can cost a company dearly, and make it liable for the costs associated with this computer intrusion. Many costs may be incurred, including legal fees, fines and penalties, crisis management expenses, compensation to third parties and so on. Why take on so many costs? Ask a specialist insurance broker for a quote now.
All the benefits of cyber-risk insurance
There are many benefits associated with this protection, which provides cover for the parties directly involved, including compensation for invasion of privacy, legal expenses and costs incurred in crisis management by the PR, as well as compensation for loss of loyalty and revenue associated with the interruption or disruption of business activities.
This cyber risk insurance also covers third parties, notably for losses suffered by customers. And generally speaking, the risks covered include network security, privacy protection, cyber extortion, the cost of restoring lost data, and business interruption.
Over the past few years, technology has become an integral part of our daily lives, whether at a personal or professional level. Information is exchanged or stored, personal or business data, transactions, etc., all of which can attract the greed of cybercriminals. That's why it's so important to protect your business with the right safeguards.
The statistics are very revealing when it comes to the scourge of cybercrime, which has affected 36% Canadian companies not once, but several times in a single year. The intrusions had a significant impact on these companies' networks and IT systems.
What is a cyber risk?
Cyber-risk is the term used when there is a danger of financial loss, business interruption or damage to a company's reputation and brand image as a result of a computer problem. Such dangers can take a variety of forms:
- the intentional unauthorized invasion of a computing device to extract secure information for use in espionage, extortion or other criminal purposes.
- accidental intrusion into a secure system, which generates significant security risks that must be carefully managed.
- IT operating risks due to poor equipment and system integrity.
Globalization is also a significant factor, as companies are linked to suppliers and customers all over the world, increasing the risk of exposure to cyber-attacks.
The impact of cyber-risks on an organization
Small and large companies alike are exposed to the risks of cyber-attacks. Yes, no one is immune! And as a result, they can be confronted with this type of problem at any time. Once you're aware of the seriousness of the problem and its consequences, it's time to take the necessary initiatives and steps to protect yourself and reduce the impact.
It is very easy to become a target of cyber-attacks for many reasons:
- cybercriminals may be company insiders;
- the most targeted structures are those whose IT capacity can be leased or operated;
- criminal settlement notices are exchanged by e-mail;
- the combination of several techniques to launch a cyber-attack;
- the use of extortion to extract money from companies by holding confidential information hostage.
How to avoid cyber-attacks?
You need to take all the necessary precautions to avoid cyber-risks, starting with training and raising awareness of computer security among your staff. Networks also need to be segmented so that only authorized people can access certain information and files.
Regular software updates are essential to prevent intrusion by cybercriminals, who exploit the slightest weakness in the system to gain access. Finally, it is advisable to ensure good data governance with well-secured systems.
Such initiatives help prevent the risk of cybercrime and better protect data and documents.
How is the cyber risk insurance market faring?
There has been an increase in demand for cyber risk insurance products, with insurance companies adapting to offer products to cover cyber risks, for businesses of all sizes. Insurance policies now cover different types of loss, such as property damage, financial loss, data recovery costs, third-party claims and legal costs. It is becoming increasingly common for companies to integrate these insurances into their overall insurance portfolio to complete their business protection.
However, as the offer is still relatively recent and risks are evolving rapidly, there is still a great deal of uncertainty about appropriate cover and rates. Insurance companies are still struggling to assess risks, and premiums can vary considerably from one company to another.
That's why it's so important for companies to understand the risks they need to cover, and to negotiate their insurance contracts carefully to ensure comprehensive coverage tailored to their needs.
