As the world increasingly moves online, so do the risks to our businesses. Cyber insurance is one way to help your business recover following a cyberattack. It covers financial losses caused by events such as data breaches, cyber theft, ransomware and more. Cyber insurance myths are also on the rise either due to resistance to change or a misunderstanding of what it is for.
Cyber insurance can be beneficial in many ways since it typically covers the cost of:
- Recovering data
- Legal proceedings
- Notifying stakeholders about the incident
- Restoring the personal identities of those affected
Due to the complicated nature of cyber insurance, there are a lot of myths out there that can be harmful to your business if you fall for them. Let’s debunk them together.
Cyber insurance myths debunked
Busting the top cyber insurance myths like the ones below is necessary so that you can make informed decisions for your business:
Myth #1: All I need to protect my business from cyberthreats is a cyber insurance plan
This could not be further from the truth. Your insurance provider will only cover your business if you meet the requirements outlined in your contract. Most reputable insurers will require proof that you have been following the proactive measures outlined in your policy. If you can’t prove your compliance, your claims are unlikely to be paid.
One of the most common insurance requirements is that you have top-tier cybersecurity protection. Despite the availability of a variety of cybersecurity solutions in the market, keep in mind that not all of them are the same. Finding a solution that offers the best protection for your needs is crucial.
Myth #2: I don’t need cyber insurance since I have cybersecurity solutions
Even though cybersecurity solutions can boost your defenses, they don’t make you immune to cyber incidents. Yes, cybersecurity solutions can reduce the risk of a cyberattack by identifying and protecting vulnerable points in your system. However, no solution can provide complete protection against all threats because staying on top of emerging risks can be challenging.
Additionally, human error can always result in vulnerabilities in a system, regardless of how secure it is. That’s why it’s a good idea to have a cyber insurance policy in place to fall back on in case of an incident.
Myth #3: Cyber insurance is easy to get
As technology advances, so do the occurrences of cyber incidents. With small and medium-sized businesses being the most susceptible targets of cybercriminals due to a lack of enterprise-level protection, the likelihood of an attack is high. Consequently, insurers are reluctant to provide coverage since the risks are significant. While policies are still available, they are becoming more expensive and difficult to obtain.
Myth #4: If I have a cyber insurance policy, my claims will be covered in case there’s an incident
If you can’t prove that you’ve complied with your cyber insurance policy’s prerequisites, your claim is likely to be rejected. This is why you might want to consider partnering with an IT service provider. An expert IT service provider can help you remain compliant with your cyber insurance policy as well as provide evidence of such compliance.
Partner for success
Cyber insurance will protect your business when the “bad thing happens”, if and only if you follow the requirements laid out in your cyber insurance contract and you can prove your business is in compliance with the policy. However, it is also important to recognize that securing cyber insurance requires significant time and effort.
Partnering with compliance experts like ITNS Consulting can make it much easier to ensure compliance and effectively protect your business. We can help you understand how to increase your chances of receiving coverage and a payout in case of an incident. What’s your next step? Schedule your free no-obligation consultation to learn more about how we can assist your company today.
We also have an infographic titled “Cyber Insurance and Why Your Small Business Needs Coverage” that you can download for more information.