What is Cyber Insurance?
Cyber insurance is a type of coverage designed to protect businesses and individuals from the financial impact of cyber-related incidents. These incidents can include data breaches, cyberattacks, ransomware, and other types of digital threats. Cyber attacks can affect a business negatively, such as causing loss of customers and revenue due to compromised trust. In addition, businesses can be liable for damages caused by third-party data loss or theft.
One of the biggest threats facing businesses today is the dramatic rise of cyber extortion and ransomware worldwide. The immediate impact of a cyberattack and its flow on effects can seriously hinder a company's ability to operate. Having a proper Cyber insurance policy in place provides you with wraparound crisis management services that give you peace of mind in the event of a cyberattack and the help you need to minimise the likelihood of an attack in the first place.
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Does my business need Cyber Insurance?
Although cyber insurance isn't legally required, many businesses are finding it increasingly essential. The pandemic has heightened our dependence on technology, with companies leaning more on digital solutions than ever before. Consequently, the risk of cyberattacks has grown. Additionally, it's becoming more common for businesses with an online presence or those handling client data to have cyber insurance as a contractual requirement.
What does Cyber Insurance cover?
- Business interruption loss due to a network security failure/attack, human errors, or programming errors
- Data loss and restoration, including decontamination and recovery
- Incident response and investigation costs
- Third Party Contactor Liability
- Delay, disruption, and acceleration costs due to business interruption
- Crisis communications and reputation mitigation expenses
- Liability from failure to maintain data confidentiality
- Liability from unauthorised use of your network
- Network extortion, Tirage & Breach consultation
- Regulatory investigations expenses
What is not covered by Cyber Insurance?
Intentional Misconduct:
Claims arising from intentional wrongdoing or illegal activities by employees or the business itself are generally excluded.
Unreported Incidents:
If you fail to report a cyber incident promptly, coverage may be denied.
Physical Damage:
Cyber insurance usually doesn’t cover physical damage to property or facilities. This is often covered by general liability or property insurance.
Routine Maintenance:
Costs associated with routine IT maintenance, upgrades, or security patches may not be covered.
Regulatory Fines and Penalties:
Coverage for regulatory fines or penalties may be limited or excluded, depending on the policy and jurisdiction.
Frequently Asked Questions
About Cyber Insurance In Singapore
Yes, ransomware protection is often included in cyber liability insurance. However, policies can vary widely among insurers, as there is no universal standard. Many insurers now offer standalone ransomware coverage, which can be particularly beneficial for businesses in high-risk industries.
Standard business insurance generally covers physical property damage, liability claims, and certain employee-related issues. However, it may not fully address losses or damages from cyber incidents. Cyber insurance is specifically designed to cover risks associated with cyber threats.
Yes, even if your business doesn’t manage significant amounts of sensitive or personal information, a minor data breach can still be costly. Cyber insurance helps cover expenses related to data breach responses, legal defenses, and other impacts from cyber incidents.
No, cyber insurance should not replace proactive cyber risk management and security measures. While cyber insurance provides protection against unforeseen and severe losses from cybersecurity failures, it should complement, not substitute, your overall cybersecurity strategy.
Yes, cyber insurance policies may have exclusions or limitations. For instance, some policies might not cover losses from social engineering attacks, deliberate actions by employees, or attacks carried out by foreign nations.
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