The quantity and intensity of cyber-attacks are expected to rise in 2020 and 2021, causing significant changes in the cyber insurance market. The cyber insurance market has always been deemed “soft,” making it relatively easy for businesses to obtain coverage at cheaper costs. However, the increased cyber threats and, in particular, the exponential growth of ransomware assaults in the last year have resulted in a hardening of the industry.
A cyber insurance policy, often known as “cyber risk insurance” or “cyber liability insurance,” is a financial product that allows companies to defer the costs of recovering from a cyber-related security breach or other comparable incidents.
Every organization, regardless of size, faces cyber risk, but the larger the company, the more areas of vulnerability it has. Privacy risk, security risk, operational risk, and service risk are the most prevalent cyber concerns. Cyber insurance, in general, is designed to protect your business from these four main hazards through four unique insurance agreements:
- Liability for network security and privacy
- Business interruption
- Business disruption on the network
- Liability of the media
- Data loss
- Loss of transferred funds
- Computer fraud
- Cyber extortion
- Omissions and errors
There’s a strong possibility you have a general liability policy if you own a small business (GL). It’s a tried-and-true method of safeguarding your company in the event of a disaster. It can also make customers feel more comfortable working with you.
There is a significant difference between the requirement for GL insurance and the need for cyber insurance that you should be aware of. General liability insurance protects you and your customers if something goes wrong.
Cyber insurance exists to defend you from persons deliberately attempting to harm your company and its consumers. Small businesses, as previously said, are particularly appealing targets for cybercriminals.