Cyber insurance is basically a vehicle to transfer risks. It:
- complements enhancements of features in cyber security
- helps insured businesses recover quickly after a cyber incident
- pinpoints specific steps that companies can take to save themselves in future
Although it is difficult to resolve the problem of cybercrimes in entirety, insurers can take steps to provide a thorough risk assessment, which will help business by:
- setting realistic expectations and realizing that some losses may be unavoidable
- better utilizing data on cyber incidents
- improving their understanding about cyber risks within their portfolios
- recognising that the purpose of cyber insurance is to reduce business risks
Reasons why cyber security should be seen as an issue relating to business risks
- Cyber security affects the entire organization, including leadership. It is very necessary to treat cyber security as a company-level issue rather than just another “departmental matter”. Everyone has a role to play in maintaining data integrity and securing the continuation of business operations.
- Cyber security expertise informs business-critical decisions. By improving businesses’ capabilities to face cyber-attacks, the economic payoff and other losses are reduced considerably. Besides, there are many training opportunities available to employees as well as board members to strengthen their cyber security resilience.
- Cyber insurance players help drastically reduce risks and save time by transferring impact. This is because it is necessary to reduce the time spent on understanding and discussing how/why a breach happens as cyber insurance enables swift action and control damage.
- Cyber-attacks dent bottom-line. This is a no-brainer. Hackers are now smart enough to find easy ways of intruding your company’s database and even evaluating the security issues relating to third-party risks. Thus, it is very necessary to deploy intelligent strategies and tools that prevent business loss or interruption.
- Attention to resilience always pays. Instead of reacting hurriedly after an attack, companies must identify ways of preventing, tackling and responding to a cyber-incident. This includes:
- Understanding your specific threats and risks
- Deciding on a business direction that your organization can realistically make
- Carrying out cyber threat drills to prepare for future
- Sharing information on risks with other companies to benefit from their expertise