How Different Cybersecurity Coverages Can Protect a Company?

Posted on: Dec 1, 2022 | 3 mins | Written by: HDFC ERGO Team

How Different Cybersecurity Coverages Can Protect a Company?

In recent years, the number of cyberattacks has increased several folds. As a result, this has a lot of organisations on their toes and constantly worried about such occurrences. Thus, it does not come as a surprise that many organisations are turning to cybersecurity insurance to secure their premises and data.

Protection against malware and ransomware is the need of the hour. Simply because of the impact that it can have on the business and customer data. Thereby making it even more important for organisations to regularly assess their cyber security policy. Here are the different cybersecurity coverages and the need for having them in the arsenal to protect businesses and customers alike.

Network Security

Network security plays an integral part in strengthening an organization against cyberattacks, thus it must be part of the cyber security policy. Any kind of failure of network security can lead to ransomware attacks and other cyberattacks on an organization. Ensuring that network security is a part of the policy can offer some of the following perks.

● Coverage for legal expenses

● Restoration of data from breaches

● Advice on public relationship

● Taking the help of IT forensics

● Negotiating the demand for ransomware and aiding with the payment

● Providing notification to customers regarding breaches

In the event of a breach, the above coverage comes into effect. Once a breach has been acknowledged, the insurance provider will ensure it with a coordinated response that involves IT forensic specialists and members of a breach counsel.

The response team would then try to find out the origin of the attack along with its scope. Insurance providers also offer a specialist to help organisations with negotiations and to aid in the process of payment of the ransom on behalf of the organisation.

The forensic team and breach counsel, in the meanwhile, assess the integrity of the data and whether client-specific information is safe. Without network security coverage, it can get quite tricky for companies to deal with such situations.

Once the forensic team confirms about sensitive data is being impacted, the counsel then analyses the situation and recommends necessary steps. These can include informing government agencies and customers about the breach. To handle media and the ire of customers, the insurance provider will also provide a team of public relations experts. The team will handle the response as far as the breach and its impacts are concerned, with the public and customers also.

A crucial decision must be made about paying or not paying the ransom money to the attackers. A couple of factors lead to making that decision such as the overall cost of restoring data that has been lost during the breach. It can be done from any backup. The cost of business or lack of any business during the interruption is also considered.

Only then will the cyber security policypay for the ransom. If the counsel and forensic team feel that it is in the best interest of the company to restore data from backups, they will recommend the same. Restoring data from backups will enable companies to get back in business with a low turnaround time. Thereby minimizing the losses related to the attack. This step can also be considered if only a very small set of sensitive data was exposed. However, the restoration of data from backups is just one of the measures and it might not be valid in all the scenarios.

Interruption of Business:

It is another helpful coverage that can aid companies to recover the losses that they have encountered due to the cyberattack. The insurance provider compensates companies for the loss of revenue for the period when the network was down. These usually include some fixed expenses, loss of profit, and a few other expenses that a company might face due to the network being breached. The absence of services to customers or other third-party entities can be a big setback for a business, even if it occurs only for a limited period of time.

Errors And Omissions:

Cyberattacks can potentially prevent companies from operating normally. In such cases, if there are other entities that are dependent on the company that is under cyberattack for their business, would be impacted as well. It can prevent companies from rendering services to their customers, which can even lead to a loss of revenue.

Errors and Omissions coverage of cybersecurity insurance is useful in such situations. The policy ensures compensation if a company fails to offer its services timely or if there is any sort of performance failure. The standard coverage for errors and omissions takes care of breaches or any sort of negligence. Also, it can cover legal expenses for a company and any disputes that might arise due to the unavailability of services.

Privacy Liability:

Privacy liability coverage is essential for companies if they deal with any sort of sensitive data. These can include personal information of customers or financial information as well. In the case of a cyberattack, it puts the customers and the company, both at risk. It offers coverage against any damage to the data stored in a company’s systems.

The plan offers coverage if a company fails to disclose a data breach on time. If a company fails to place an identity theft program in place that is recommended by the government, the plan offers coverage for that as well. It even covers denial of service due to a malicious attack along with legal expenses needed for the above coverage.

Cyber insurance in India offers privacy liability coverage. Enabling companies to go about their business without having to worry about the impacts of a cyberattack.

Need For Cybersecurity And Insurance:

A cyberattack of any form can vastly impact the business of a company and the integrity of its data. Here are a few other crucial reasons why opting for cybersecurity insurance is difficult to ignore.

● Cyber insurance in India offers more coverage than a company might think. It covers expenses related to ransom, the expenses that a company undergoes to notify the customers and media, expenses related to public relationships, and many more.

● A company might not host the servers or the data, but they are still liable for the integrity and safety of the client data.

● A standard liability policy does not cover damages due to cybersecurity attacks.

● The cost of cyber insurance in India is rather affordable than what some might believe.

Conclusion

Cybersecurity is usually an extensive topic and might need a lot of close attention to bridge any gaps. The line of service of a business might pose additional risks or requirements. For example, a company that renders financial services might have a different set of risks as compared to a company that deals with healthcare data. Thus, the coverage that a company needs would vary based on a multitude of factors. With the help of experts and panels, a company can decide on the cyber security policy and its coverage.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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