Cyber Insurance: The Essential Checklist
Cyber security insurance exists to protect businesses from the unexpected, undesirable, and unavoidable. Only about half of companies currently have cyber insurance, which is surprising given that all of them are at risk of being attacked.
It is now time for large and small businesses to consider cyber insurance seriously.
This checklist will assist you in focusing on the most critical issues, asking the essential questions, and ultimately making the ideal decision regarding your cyber insurance.
Step 1 – Determine your risk level:
Every company should expect to be actively targeted by hackers. However, some businesses are at a higher risk because they handle sensitive data, rely on complex or outdated technologies, have limited cyber security resources, or have a history of being breached.
Step 2 – Determine your level of need:
When you start delving into the details of cyber insurance policies, they, like most insurance policies, become a lot more opaque and obscure. Here are some examples of areas where you might require coverage:
- Hardware and software security for networks
- Insurance for lost or stolen laptops and mobile devices in the aftermath of a data breach
- The business disruption caused by a cyber event
- Coverage for ransomware and other forms of cyber extortion
- Public relations and crisis management
- Third-party system failures
- Forensic examinations
Once you understand your IT infrastructure’s strengths and weaknesses, you can pursue cyber crime insurance policies that protect what you need while excluding what you don’t.
Step 3 – Research the different types of cyber insurance:
The cyber insurance market has grown significantly now that cyber security is a mission-critical priority for responsible businesses. However, most cyber insurance policies still fall into one of two categories:
- First-party protection
This type of coverage is intended to cover the costs of responding directly to a cyber event. If an attack or accident occurs, first-party coverage provides funds to help resolve and mitigate the problem as soon as possible.
- Liability to a third party
This type of coverage is intended to cover a cyber event’s associated or delayed costs. Ultimately, those costs are frequently far higher than what is spent immediately to resolve an event.
Step 4 – Determine your budget:
This is where the evaluation process becomes complicated. When compared with other types of insurance, cyber insurance needs more standardisation. Even if they are similarly priced and titled, the details of one policy may differ significantly from the details of another.
Step 5 – Pay attention to the details:
The price of cyber insurance policy can vary highly. It is critical to calculate how much money can be spent on cyber insurance versus how much money can be lost.
Step 6 – Shop around for the ideal policy and price:
The preceding steps will be the focus of your efforts. Understanding the scope and limitations of cyber insurance is critical before committing to a policy.
Step 7 – Rethink your cybersecurity strategy:
Finding the correct type of cyber insurance takes time and effort. However, once you have a policy, you should have enough peace of mind to focus your efforts elsewhere. Cyber insurance is a passive measure, whereas cyber security must be active.
Step 8 – Evaluate and update:
Throughout this checklist, we’ve mentioned the importance of evaluating and updating your cyber security insurance policy several times. You may find yourself with a higher liability than usual, exposing some of your data.
* Standard T&C Apply
** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
# Visit the official website of IRDAI for further details.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
