When purchasing a new vehicle or buying a house, it is not surprising that one of the first ideas that come to mind is hiring insurance. We usually think about insuring our most valuable properties and covering ourselves against the possibility of suffering a theft or an accident.
Even when we get hold of the latest mobile phone model on the market, we consider paying an extra <<just in case>>. But, sometimes, we must remember to apply these aspects as important as technological security to our company.
For this reason, it is essential to know what cyber insurance is and its relationship with your company’s risk management.
What is the current situation of your company in the area of computer security? If you are still taking the first steps to implement a Security Master Plan, you will have support material for its evaluation and preparation in this link. In the first phase, the identification of cyber risks includes basic information before contracting a cyber insurance or cyber risk insurance.
What is cyber insurance?
According to the report published by ENISA Commonality of risk assessment language in cyber insurance, cyber insurance is a means of protection against losses and a form of risk management related to the Internet, with the infrastructures and activities of information technology of a company. It is used to prevent an uncertain future loss linked to these risks.
- Cyber insurance, or cyber risk insurance, works like any other type of insurance product, but in this case, in cybersecurity.
- Cyber insurance offers an extra layer of protection to the preventive cybersecurity measures that we should already have implemented in our company, but, in no case should it replace them.
- As in any other type of insurance, cyber risk insurance should cover not only the economic impact of the attack itself but also take into account other casuistry derived from the incident.
- It is an insurance product whose purpose is to protect SMEs and the self-employed from the direct impacts of a cyberattack and the consequences that these may have on the business. In other words, it is logical to think that our car insurance not only pays for the repair of the damage caused by accident but also provides us with a replacement vehicle while ours is in the workshop.
- Therefore, cyber insurance should cover the investigation of cybercrime to recover stolen data, even compensating for the loss of income and managing the company’s reputational risk. In this regard, contracting cyber risk insurance can provide us with the peace of mind of knowing that our company will suffer a cyber-attack if the other protection measures fail.
Should I take out cyber insurance?
Undoubtedly, essential and critical factors must be addressed and resolved by the business strategy of an SME and a self-employed person, which can justify contracting cyber insurance.
They are mainly grouped into two large blocks:
Regulatory pressure for SMEs and the self-employed due to the recent legislation published by the European Commission of mandatory compliance for all Member States regarding cybersecurity and data protection. You can access more information here:
The General Data Protection Regulation or GDPR: Through cyber insurance, you can access advice and compliance with this legal regulation on data protection. Giving rise to a risk coverage against possible threats of data theft of our clients, suppliers or company personnel or non-compliance in the application of this regulation in the information systems of our company.
As a sign of the importance of this regulation, large corporations are including the contracting of cyber insurance in their business strategies, an initiative led by the Chief Information Security Officer (CISO)in large organizations as an additional mechanism for cyber risk management. Legal compliance in this matter allows us to generate greater confidence in our customers, suppliers and any entity linked to our company, thus improving its reputation.
This Directive regulates greater cooperation and management of cybersecurity risks between organizations in these sectors, such as energy, transport, health, production, transformation and distribution of food and digital service providers. Having 21 months from its publication for its transposition into national legislation and through contracting cyber insurance, it would be possible to have legal advice and to know the implications that this Directive will have in our company.
The exponential increase in cyberattacks: As a result of the pandemic, cyberattacks continue to grow in number, frequency and severity in companies. Every day they are more silent, invisible and irreversibly affect the daily professional activity of companies.