Cybercrime is one of the biggest risks that businesses face in 2023. However, cyber insurance is often described as one of the hardest policy types for businesses to understand. We look at common types of cybercrime claims businesses make.
Cyber insurance is associated with jargon and unnecessary complexity. This is likely because insurance companies have struggled to translate the protection for the changing threats that businesses face into simple wordings. The truth is, most businesses are more likely to be a victim of a cyber attack, i.e. ransomware than their premises burning down.
Every year there are more and more online-only businesses, so data is more vital to many businesses than any kind of tangible stock. Cyber breaches or attacks are also a major source of bad PR for companies.
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The future of Cyber insurance
Cyber insurance has evolved from being a reactive solution to a proactive one that begins from the moment a policy starts. Vulnerability audits are often conducted in conjunction with the insurer’s preferred service providers. Ongoing monitoring tools are also recommended and guidance provided regarding useful risk management protocols.
Cyber experts note that the threat ‘landscape’ has changed drastically. Businesses are being targeted because they’re vulnerable rather than valuable. Smaller companies often have easier to penetrate security. Pursuing several weaker SME victims makes more sense than targeting larger firms with sophisticated defences and qualified IT personnel in place.
There is now a bigger collaboration between insurers, governments and those in the private sector on cybercrime. Institutions must be educated, ready and innovating due to the speed of change. The future of cybercrime is daunting, but it is essential that businesses are covered and that insurance companies continue to create products that fulfil the ever-changing need.
95% of cyber claims fall into these 3 categories
Theft of funds
This is a crime as old as time itself, except this time done digitally. Nearly every business can now move money around electronically and remotely. Unfortunately, this means that it is much easier to become a victim of cybercrime. Instead of stealing physical funds, criminals are increasingly stealing electronic funds through a range of different scams and systems. If businesses are found to have been negligent, then their bank may not reimburse them.
Theft of data
Data is one of the most valuable assets businesses will have in 2023. Unfortunately, if something has value, thieves will try their best to separate you from it. Identity theft has reached record levels around the world, and in order to commit identity theft, criminals need data. Seemingly regular information such as names and addresses stored on a computer network can be worth money to cyber criminals. It can also be used to threaten companies and extort them for money.
For many large businesses, data is integral to their company.
Not only this, but a breach can damage a company’s reputation immeasurably. This is especially so if they are a company that collects a lot of personal information i.e. a bank or large software company. Naturally, the more sensitive the information that a company has about you, the more important it is that the information is secure.
Damage to digital assets
In order to function day-to-day, businesses now have an incredibly high dependency on online or digital systems, and criminals know this. By either damaging or threatening to damage a firm’s digital assets, attackers know that they can extort money from victims who might prefer to pay a ransom rather than see their business grind to a halt. And even after paying hackers, businesses are left with a system that may not work properly or is vulnerable.
In today’s world of tech innovation, it can be difficult to know how vulnerable you are as a company at one time. As fast as security or insurance companies can create solutions, cybercriminals can create loopholes and vulnerabilities just as quickly. That’s why a good cyber insurance product that takes into account the value of your data and assets is essential. A thorough audit of your current cyber security and the protection you have in place could prove critical for your business.