The Importance of Cyber Risk Insurance for Vancouver Businesses
Thanks to modern-day businesses’ massive reliance on digital data, the risk of cyber crimes have become more apparent. The CyberEdge Group’s Cyberthreat Defense Report (CDR) of 2021 shows that 85.7% of Canadian businesses have experienced at least one cyber attack in the last 12 months. The most common threats organizations face when dealing with cyber crimes are viruses, vandals, hackers, and corporate spies who steal trade secrets or proprietary information. A substantial portion of attacks is undertaken by negligent employees who unintentionally harm your systems or vengeful workers in our organization.
Cyber risk insurance, also known as network security insurance, e-business insurance, cyber coverage, hackers insurance, or pirate policy, among many others, aids your company in recovering after a data breach or any cybercrime. It plays a critical role in minimizing the danger exposed by any company that has an online presence or uses a digital device. This post will discuss the importance of having the right cyber risk insurance coverage to protect your company.
What is Cyber Risk Insurance?
Cyber risk insurance is a unique type of coverage that protects in the event of computer hacks, virus assaults, copyright infringement claims, denial-of-service attacks, liability for online content, and other tech-related damages. If your business experiences a cyber attack, a company that has taken out cyber coverage will be compensated for a wide range of losses, including:
- Data loss
- Equipment damages
- The cost associated with legal expenses, forensic analysis, and legally mandated notifications
- Privacy laws violation
- Risks related to social media platforms and public relations
- Infringement of intellectual property rights
- Loss of revenue
- Interference with e-commerce services and general business operations
Understanding your organization’s best cyber risk insurance coverage can be challenging. This is because many cyber insurance applications are becoming more complex to understand and navigate for the average business owner. The technology involved in mitigating losses in case of a data breach is technically exhausting. As a result, you need the right cyber coverage provider to guide you in getting the appropriate coverage and remain protected if a cyber attack or data breach occurs.
How Does Cyber Risk Insurance Work?
As mentioned, cyber coverage provides financial compensation to organizations when a data breach or cyber attack occurs. Generally, two types of cyber risk insurance are available on the market. They include:
1. First-Party Insurance Cover
This involves the costs covered when your business experiences a data breach or cyber attack. This may include expenses related to credit evaluation, informing clients of the breach, loss of revenue, extortion from ransomware attacks, loss of digital data, legal services, forensic assessment, public relations, and reputational harm, among many others.
2. Third-Party Insurance Coverage
This refers to an insurance cover that compensates third parties who have incurred losses due to your mistakes or actions. For instance, if one of your company’s computer systems is compromised and a client’s data is exposed, they might file a lawsuit against you. A third-party cyber risk insurance cover will cover any expenses awarded to the third party that brings the action against you.
Who Needs Cyber Coverage?
Cyber coverage was a relatively new specialty product available on the market in the past. However, due to the drastic increase in cybercrime and massive dependence on digital data by organizations in the last few years, this type of insurance has made its way to the forefront.
Nowadays, companies collect sensitive customer data or save their private information on computers. Cyber risk insurance is essential whether you have a charitable organization, a small or medium business, or even a retail business. Nothing is completely secure, no matter how robust your computer network security or backup procedures are.
As your final line of defense against cyberattacks, cyber risk insurance protects both your company and the customers. You may even save costs by combining this coverage with another business insurance policy to get an extensive portfolio of business liability coverage.
Does General Liability Insurance Protect Businesses from Cyber Crimes?
Unfortunately, traditional insurance policies do not cover digital exposures or the hazards of conducting business online. You are shielded against these risks by having cyber risk insurance for internet communications.
You can understand the worth of cyber coverage by considering how other insurances work. For instance, the building that hosts your organization will likely have fire extinguishers and a sprinkler system. Despite this, you will still take out fire insurance. Similarly, even if your computers are equipped with firewalls and anti-virus software, you still require cyber risk insurance.
Is There a Difference Between Data Breach Coverage and Cyber Coverage?
The main distinction between data breach insurance and cyber risk insurance is the parties involved and the scope of the cover. Most cyber crimes experienced by your business and any other third-party involved are under the cyber risk insurance cover. On the other hand, data breach insurance only compensates organizations for data loss you experienced or caused.
Protect Your Organization from Cyber Crime and Data Breaches
Ransomware attacks and cybercriminals are customary in today’s world. These threats keep reinventing new strategies to disrupt, steal data from, and profit from the operations of businesses throughout Canada. By getting the right cyber risk insurance coverage, you are one step ahead in safeguarding your business’s and your client’s operations.
Compunet Infotech is a Vancouver-based IT firm that understands the value and power of technology. Thanks to its years of experience and expertise, we are ready to help you fill in your cyber risk insurance application with all the relevant information to ascertain that your business is safe when an attack happens.
In addition, we will evaluate and ensure that all the appropriate cybersecurity solutions are in place to adequately protect your organization’s operations. Our team of experts will also assist you in asking the right questions to fully comprehend your company’s goals, needs, and requirements before implementing the technologies that will make the most significant difference in its ability to streamline operations and increase productivity.
So, contact us immediately for more information on the best cyber risk insurance advice and cybersecurity solutions for your organization in Vancouver.