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Why Cyber Insurance Makes Sense for Business

· Cyber Insurance

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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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 
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