{"id":7666,"date":"2021-08-26T10:29:32","date_gmt":"2021-08-26T10:29:32","guid":{"rendered":"https:\/\/outofsite.biz\/cynance\/?p=7666"},"modified":"2021-08-26T10:29:33","modified_gmt":"2021-08-26T10:29:33","slug":"cyber-liability-insurance-coverage-worth-the-cost","status":"publish","type":"post","link":"https:\/\/outofsite.biz\/cynance\/cyber-liability-insurance-coverage-worth-the-cost\/","title":{"rendered":"Is cyber liability insurance coverage worth the cost?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7666\" class=\"elementor elementor-7666\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-45e0897e elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"45e0897e\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2a13f229\" data-id=\"2a13f229\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-264884f6 elementor-widget elementor-widget-text-editor\" data-id=\"264884f6\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.11.5 - 14-03-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><span style=\"font-weight: 400;\">As the risk of cyber attack increases, and the cost of those attacks rises, many organisations of all sizes and across all sectors and industries have invested in cyber liability insurance coverage to mitigate the impact of a cyber attack when it occurs. As of now, <\/span><a href=\"https:\/\/www.gov.uk\/government\/statistics\/cyber-security-breaches-survey-2021\/cyber-security-breaches-survey-2021\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">43% of businesses and 29% of charities<\/span><\/a><span style=\"font-weight: 400;\"> in the UK now have some form of cyber insurance, up from 32% for businesses in 2020.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However as the market grows, and more organisations buy cyber risk insurance, it is becoming increasingly clear that while it is beneficial to many organisations, cyber liability insurance is not a replacement for an effective cyber security programme.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is cyber liability insurance coverage?<\/span><\/h2>\n<p><a href=\"https:\/\/www.hiscox.co.uk\/business-insurance\/cyber-and-data-insurance\/faq\/what-is-cyber-insurance\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Cyber insurance<\/span><\/a><span style=\"font-weight: 400;\">, also known as cyber risk insurance or cyber liability insurance, covers the costs of data breaches and other forms of cyber attack.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Cyber risk insurance offers risk transfer opportunities for organisations by providing a backup in case of an attack. However this is often contingent on having cyber protections in place from the start.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most cyber liability insurance policies will cover first party costs from a cyber attack, paying out for lost, damaged, stolen, or corrupted data or electronic systems. This includes the cost of investigating the attack, recovering data (including in some cases paying the ransom in a <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/is-it-legal-to-pay-ransomware-demands\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">ransomware attack<\/span><\/a><span style=\"font-weight: 400;\">), loss of income from downtime, the costs of any activities associated with reputation management, and more.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Third party cyber liability insurance coverage will include the costs of damages and settlements to customers and other stakeholders (including GDPR fines), and the cost of legal defence should the company be sued as a result of the cyber attack.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Why buy cyber insurance?<\/span><\/h2>\n<p><b>Cyber liability insurance coverage is tailored to cyber attack<\/b><\/p>\n<p><span style=\"font-weight: 400;\">In today\u2019s world, most organisations rely on their IT systems to carry out their business. However those same IT systems are also connected to the internet, making them vulnerable to attack from cyber criminals who will look for vulnerabilities to exploit and gain access to systems.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Cyber risk insurance is specifically designed to pay out against these cyber attacks, and as such it will provide cover for the specific damage caused by a cyber attack, where other forms of insurance policy may not.<\/span><\/p>\n<p><b>Cyber attack can be ruinously expensive<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Cyber attacks cost money. The various costs from a cyber attack include:<\/span><\/p>\n<p><b>Ransomware costs<\/b><span style=\"font-weight: 400;\">: There are the obvious costs of unlocking or buying back data that has been encrypted or stolen in an attack and held for ransom. According to research by <\/span><a href=\"https:\/\/www.sophos.com\/en-us\/press-office\/press-releases\/2021\/04\/ransomware-recovery-cost-reaches-nearly-dollar-2-million-more-than-doubling-in-a-year.aspx\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Sophos<\/span><\/a><span style=\"font-weight: 400;\">, the most common ransom payment is $10,000 but the average ransom payment in 2021 is $170,404, with some ransom payments far exceeding that figure.<\/span><\/p>\n<p><b>Output loss costs:<\/b><span style=\"font-weight: 400;\"> Cyber attacks often cause downtime and disruption to services. The longer systems are offline, the longer employees can\u2019t do their jobs and customers won\u2019t receive their services, reducing productivity and revenues.<\/span><\/p>\n<p><b>Recovery costs: <\/b><span style=\"font-weight: 400;\">Recovery costs can far outweigh the direct costs of the attack. In fact the research from Sophos found that the average cost of recovering from a ransomware attack is $1.85 million &#8211; 10 times the cost of the ransom itself.<\/span><\/p>\n<p><b>Ongoing costs: <\/b><span style=\"font-weight: 400;\">Many organisations face loss of reputation as a result of suffering a cyber attack, and with that a loss of customers who choose to shop elsewhere. As recently as 2018, 60% of businesses who suffered a ransomware attack <a href=\"https:\/\/cybersecurityventures.com\/60-percent-of-small-companies-close-within-6-months-of-being-hacked\/\" target=\"_blank\" rel=\"noopener\">went out of business<\/a> within six months of the attack.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For some businesses, especially smaller businesses, cyber liability insurance coverage has proven useful as it has smoothed the recovery process and made the difference between continuing to trade or closing their doors. From that perspective alone, cyber insurance may well be worth it.<\/span><\/p>\n<p><b>Some sectors\/ organisations are attractive targets<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Many cyber criminals (especially ransomware gangs) are looking to make a profit from their activity, and will choose targets that will realise the biggest returns from an attack. Some sectors, and some organisations within those sectors present particularly attractive targets for attackers because of the data they hold.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Businesses within those sectors may find that cyber insurance benefits will far outweigh the costs.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Is cyber insurance worth the cost?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The section above looked at cyber insurance benefits, this section discusses the ways in which cyber liability insurance coverage may simply be an expense.<\/span><\/p>\n<p><b>Cyber risk insurance premiums are rising<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Cyber risk insurance doesn\u2019t come cheap. Premiums are increasing, and coverage is being scaled back as some insurers are refusing to pay claims against <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/is-it-legal-to-pay-ransomware-demands\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">ransomware payouts<\/span><\/a><span style=\"font-weight: 400;\">. Furthermore, some organisations may never need to make a claim against the insurance, meaning they have paid out thousands of pounds a year for nothing.<\/span><\/p>\n<p><b>Cyber liability insurance coverage may be\u2026 patchy<\/b><\/p>\n<p><span style=\"font-weight: 400;\">As the market evolves, so do the cyber insurance products on offer. As a result not all cyber liability insurance policies will cover everything, and the cost of getting the right amount of coverage may add significantly to the overall cost of the insurance.<\/span><\/p>\n<p><b>Cyber liability insurance comes with an expensive list of requirements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Many insurers are now tightening up their requirements for organisations looking to buy cyber risk insurance. They will look to see whether an organisation has been attacked in the past (with or without making a claim), and may adjust coverage or premiums accordingly.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Increasingly, insurance companies are also asking for evidence that the organisation has a <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/security-risk-and-compliance\/cybersecurity-risk-management\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">cyber security programme<\/span><\/a><span style=\"font-weight: 400;\"> in place ahead of insuring them.<\/span><\/p>\n<p><b>Cyber insurance is linked to rising ransomware demands<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The cyber security industry have found a cause and effect relationship between cyber insurance and the increase in ransomware demands. As cyber liability insurance coverage has increased and matured, it has encouraged cyber criminals to become bolder. For example, evidence suggests that the <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/is-it-legal-to-pay-ransomware-demands\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">higher ransomware demands<\/span><\/a><span style=\"font-weight: 400;\"> are a result of more organisations paying up because they have insurance, and that some cyber criminals are <\/span><a href=\"https:\/\/www.insurancejournal.com\/news\/international\/2021\/07\/08\/620508.htm#\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">tailoring their ransom demands<\/span><\/a><span style=\"font-weight: 400;\"> to the coverage in their victim\u2019s insurance policies.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Cyber liability insurance coverage isn\u2019t a replacement for a solid cyber security programme<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Cyber liability insurance coverage will not instantly solve all cyber security issues, and it will not prevent a cyber attack from taking place. Instead, cyber liability insurance coverage should be seen as the final piece in a <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/security-risk-and-compliance\/cybersecurity-risk-management\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">cybersecurity programme<\/span><\/a><span style=\"font-weight: 400;\">, the one that will catch the organisation and enable it to recover if all other protections should fail.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The cost of preventing a cyber attack is far lower than the cost of mitigating the impact of a cyber attack. A multi pronged cybersecurity programme that includes effective <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/infrastructure-security\/network-security\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">network<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/infrastructure-security\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">infrastructure security<\/span><\/a><span style=\"font-weight: 400;\">, employee training, and comprehensive <\/span><a href=\"https:\/\/outofsite.biz\/cynance\/guide-to-cyber-security-incident-response-planning\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">incident response plans<\/span><\/a><span style=\"font-weight: 400;\"> as well as support from cyber insurance will enable organisations of all sizes to weather any cyber attack.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Stay safe<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>As the risk of cyber attack increases, and the cost of those attacks rises, many organisations of all sizes and across all sectors and industries have invested in cyber liability insurance coverage to mitigate the impact of a cyber attack when it occurs. As of now, 43% of businesses and 29% of charities in the&hellip;<\/p>\n","protected":false},"author":10,"featured_media":7685,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[63,62],"_links":{"self":[{"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/posts\/7666"}],"collection":[{"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/comments?post=7666"}],"version-history":[{"count":0,"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/posts\/7666\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/media\/7685"}],"wp:attachment":[{"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/media?parent=7666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/categories?post=7666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/outofsite.biz\/cynance\/wp-json\/wp\/v2\/tags?post=7666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}