Cyber Insurance is a new form of insurance policy that is gaining momentum in this 21st century. It is the type of insurance that covers losses or damages of our data. It is the type of insurance policy that covers financial losses due to data breach or other cyber related crimes. Because of the increasing rate of cyber attacks and threats in this digital age, cyber insurance is becoming more prominent. Cyber attack is a big threat to our data well being, which is why it’s advisable that we sign up for cyber insurance policy so that insurance company can help us recover our data should there be any attack, loss or damages to our database.
In our data driven society, cyber insurance is very crucial. Yes, our society today is ruled by information, practically everything we do online is based on sending and receiving data and this data we send and receive are later store or saved in a place called database or data bank as some may call it. Now what happen if our data bank got damaged or breached? The truth is, retrieving or data recovery is very expensive and this is where cyber insurance policy would be of a help to us.
It was reported in (thought leadership on cyber insurance by Allianz.ng) that only 15% of the organization in Nigeria both private and public can boast of their teams security ability to act should there be any cyber attack while 71% have reported an increase in data breach since the out break of the pandemic with financial institutions being the most targeted.
They also revealed that 71% of cyber security professionals and experts had reported an increase in security threats since the start of the pandemic. Read more on cyber insurance here
Organizations especially financial institutions in time like need to sign up for Cyber Insurance policy to curb these risks. Cyber attack is not predictable, companies stands a risk of being attacked knowingly or unknowingly.
Who really need Cyber Insurance?
- If you rely on technology to do business
- If you are the custodian of your company’s information
- If you manage and store company’s data online
- If you manage and store your customers details online
- If you use any kind of electronic device to store, send and receive data.
If you fall under one of the above categories, then you may need some level of protection to avoid crying ”had I know” this is because restoring data is very- very expensive.
Importance of Cyber Insurance
- For privacy protection of your clients/ customers sensitive information
- Prevents data loss
- Prevents court cases that may rise against you or your company should there be a breach of your clients sensitive data
Types of Cyber Insurance Policies
1. First Party Cyber Insurance Policy
This policy covers the expenses the insurance company will pay directly to an organization or company for a breach or damages done to their data. The insurance company is expected to pay the organization directly in respect to their claims. Coverage sometime can include, lost or damage to electronic data, financial lost, or any other related cyber crime.
2. Third Party Cyber Insurance Policy
This policy applies to when somebody else, usually a client of your company drags the company to a court of law demanding for compensation for damages done due to cyber crime. This usually happen when the clients data is hacked and leaked from the company’s database. The insurance company is usually the one that will compensate the clients.
It’s advisable that companies of all size sign up for Cyber Insurance Coverage, both small and big, irrespective of your size. Some times small companies will ignore cyber insurance because they assume they are small so they are not the target by the bad guys. My advice is that you should avoid that kind of mentality this is because as a small company, you cannot afford to spend the kind of money your so called big companies spend on cyber security. So small companies are prone to attack more than the big companies.
Related Article: 15 Reasons why you need an Insurance Policy in Nigeria