What is Cyber Insurance?
With technology being so deeply entwined in businesses, one of the greatest fears of businesses that store and process sensitive customer data is to experience a malicious cyber-attack. Cybercrimes, and threats, keep evolving, and organisations need to be vigilant and continually review and tighten their cyber security management policy and leave no stone unturned when it comes to protecting their digital assets from external threats.
Cyber insurance is a type of insurance that protects your business against financial losses arising from malicious cybercrime, which can include data breaches, theft, system hacking, ransomware extortion payments and denial of service.
Why is Cyber Insurance important?
The worst consequence of a cyber-attack is complete interruption of business operations and, furthermore, damage to your business reputation, which can in turn, erode customer trust. Cyber insurance is a necessity to provide coverage for financial loss providing cover for costs associated with investigation, damages and recovery after a cyber incident. A cyber policy with adequate coverage will save you from potential loss and expense to remedy an attack and pay fees, penalties, and settlements to external parties affected.
What does Cyber Insurance Cover?
Coverage of cyber insurance is in two sections. First-party coverage and third-party coverage.
First-party liability coverage provides financial assistance to minimise and or mitigate the resultant impact of a data breach or cyber-attack on your business, protecting your data and digital networks. Costs related to a cyber can include cover for:
- Incident response costs
- Business income loss
- Data restoration
- Breach response costs
- Notification costs
- Legal defence costs
- Cyber extortion
- Regulatory fines and penalties
- Payment Card Industry (PCI) fines, penalties and assessments
- Cyber reputational harm
Third-party cyber liability coverage provides liability coverage for businesses that provide professional services to other businesses for a client's online security that can be compromised by cyber attacks. Covering costs such as:
- Payments and settlement costs to consumers affected by the breach
- Losses related to defamation
- Litigation costs and responding to regulatory inquiries
- Government fines and penalties
Insurance Advisernet can provide cyber risk insurance solutions through our network of insurance brokers who can tailor cover suitable to your needs. Contact an Insurance Advisernet representative today to discuss Cyber insurance.
Frequently Asked Questions
What is not covered by cyber insurance?
Some typical exclusions for a cyber insurance claim are the following:
- A pre-existing breach prior to obtaining the policy
- Cyber-attacks ministered by insiders
- Poor infrastructure that exposes the firm to cybersecurity incidents
- Cost of enhancing the tech system
Is cyber insurance required in New Zealand?
The Insurance Council of New Zealand (ICNZ) urges businesses to purchase some form of cyber insurance protection in response to the spate of high-profile cyber incidents in recent years. The council emphasised that a Cyber insurance policy should be the last line of defence after due diligence and maintaining stringent cyber security risk management systems.
Does cyber insurance cover data loss?
Cyber insurance protects businesses and assists with the recovery from a cyber incident which can include data breaches, theft, system hacking, ransomware extortion payments, denial of service and loss of data.
What are the benefits of cyber insurance?
Cyber insurance is an absolute necessity to provide coverage for financial loss providing cover for costs associated with investigation, damages and recovery after a cyber incident. The benefits of having a Cyber policy in place with adequate coverage will protect you from potential loss and expense to remedy an attack and pay fees, penalties, and possible settlements to external parties affected.