The risk of becoming the victim of a cyberattack continues to grow for businesses. All the more important, therefore, is the right protection and an emergency plan for the case. More and more insurance companies now offer cybercrime insurance. But is it worthwhile for companies anyway?
Cyberattack: Business more and more endangered
Cybercrime is diverse. The attacks range from the infection of technical devices with malicious software to data misuse to the complete paralysis of a complete corporate network. In between, there are many more ways that hackers can perform a cyberattack. The risk of becoming the victim of an attack continues to increase. For companies in, the risk of a cyberattack as security risk number 1 applies.
This is not surprising, after all, the impact of a hacker attack on companies is enormous. On the one hand, the high costs of containment are a factor. On the other hand, the reputation of the company is often affected by a cyber attack – especially if it leads to a data breach.
The protection of the company network is thus more and more in the focus of attention for companies. This includes, above all, a comprehensive internet security concept, but also an emergency plan that works in case of emergency. That’s why cybercrime insurance is becoming increasingly attractive for more and more companies. But is it worthwhile at all?
Basic protection against cyberattacks is necessary
Malware, Ransomware or a Denial-of-Service Attack: The methods hackers use to access sensitive corporate data today are diverse. A certain level of basic protection is commonplace in companies. Often, however, the measures are not enough to protect the company network against attacks with ever new technologies and tricks.
The basic protection includes at least the use of reliable antivirus software and firewalls, regular data backups, and software updates as well as a computer security concept for the administration of user accounts and rights. But beyond that, you should also regulate corporate security through appropriate solutions and measures. However: A residual risk always remains. This is exactly where cyber crime coverage, also called cybercrime insurance, comes into play.
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Cyber insurance coverage against cyberattack – what is behind it?
There is no one hundred percent protection against a cyber attack. But companies can counter the residual risk, which remains despite a generous security concept, with cyber insurance. In doing so, the insurers calculate the protection requirements and invest in suitable protective measures on the basis of a so-called risk analysis.
The concept is not new. Back in 2012, the EU Network and Information Security Agency (ENISA) issued a study examining the meaning of cyber insurance. The result: For companies, such insurance offers some advantages. So she pays in a cyberattack , which provides for a loss of business, a previously agreed compensation. In addition, there are usually other services which include, for example:
- Compensation for business interruptions
- Assumption of third party damages
- Offer legal advice for data breaches
- Reimbursement of data recovery costs
- Payment of IT forensics
However, what services are actually included in a cyber insurance varies from provider to provider.
So far, only a few companies use cyber insurance
Although the risk for companies to become victims of a cyberattack is increasing, so far only a few companies use cyber insurance. According to a study: just five percent of the surveyed companies have taken out cybercrime insurance. After all, about 18 percent of companies plan to take out such insurance in the future.
Overall, the importance of such insurance is likely to increase further in the future. Currently, it is especially worthwhile for large companies and corporations, because these are still the primary target of cybercriminals. But the danger for small and medium-sized enterprises (SMEs) is also increasing. However, a cyberattack can have catastrophic effects, especially for smaller companies. Cyber insurance can, therefore, be particularly useful for SMEs to cushion the financial losses caused by a cyberattack and the resulting loss of business.