Why Cyber insurance is indispensable in the modern world

In a world where digitisation is central, cybercrime is increasing rapidly. Hackers, phishing attacks and ransomware pose a serious threat to businesses and individuals alike. The consequences can be far-reaching: financial loss, data loss and reputational damage.

Cyber insurance offers protection against these risks. Depending on the policy, insurance can help with damage recovery, legal costs and even ransom payments in the event of ransomware attacks. This makes cyber insurance not an unnecessary luxury these days, but a necessity in the modern digital society.

Awareness is crucial
Many cyber attacks start with human error, such as clicking on a malicious link or using weak passwords. By taking preventive measures such as strong passwords, two-step verification and regular backups, you reduce the risk of an attack. Whether you are an entrepreneur or an individual, it is important to think about the consequences of cybercrime and how to protect yourself against it.

Overall, there are two insurance products for covering cyber risks:

1. Standard cyber insurance

Standard cyber insurance can be taken out easily and quickly. Many insurers use the following conditions for standard cyber insurance:

• a maximum business turnover of, say, €25 million;
• operating in a sector with a standard risk profile;
• a maximum number of personal data of, say, 100,000;
• the use of multiple authentication;
• a clear policy for updates to key systems; and
• a good backup policy.

The conditions may differ from one insurer to another.

2. Customised cyber insurance

Does a company not fit within a standard cyber insurance policy? Then a customised product is a possible solution. Taking out a customised product takes more time and energy. Stricter requirements apply to the level of security within the company.

But what do you actually insure with cyber insurance?

A Cyber Policy has different coverage components, which again are offered differently by each insurer. These include the following:

• Privacy liability: when there is a violation of the right to privacy or wrongful disclosure of personal data;
• The costs of investigations by, for example, the judiciary or credit card companies;
• Claims by individuals;
• Fines imposed by regulators, or other mandatory fees;
• Cyber liability: when there is a violation of the right to privacy or wrongful disclosure of personal data. Suppose a fine from the regulator follows. Or an employee has been negligent in terms of computer security resulting in the shutdown of systems. Or the dissemination of confidential data. If a website or e-mail inadvertently violates copyright, spreads defamation or contains a virus, the insurance covers the resulting costs;
• Data breach: transmission of malicious software;
• Business damage: when work cannot be performed due to deliberate blocking of the website, intranet, network, machines, computer systems and data. This damage is in fact not insured on standard business interruption insurance;
• Hackerschade;
• Cyber extortion: The damage caused by hackers holding your website or data hostage is insured. You will get assistance from security experts and any ransom paid will be reimbursed;
• Extra call charges: the extra call charges I am charged as a result of malware;
• Loss of Money;
• System intrusion;
• Cost of forensic investigation;
• Costs of communications with providers, customers, regulators, judiciary, credit companies and other stakeholders;
• Cost of additional customer support, e.g. via a call centre;
• Costs of crisis management, reputation restoration and PR campaigns;

In short, it is definitely worth taking a closer look at this insurance!