If you have any confidential information stored, cyber insurance is probably a service you’ve heard of. Cybersecurity insurance helps protect businesses from any financial losses that could come from a data breach or cyber attack. As with all other things, this insurance comes with both pros and cons, including payout issues that are prevalent in lawsuits that have occurred over the years.
Statista reported that during the second quarter of 2022, internet users worldwide saw approximately 52 million data breaches.
Businesses in industries such as healthcare, finance, and retail often need cybersecurity insurance due to the sensitive information they handle. However, any business can benefit from this protection as cyber attacks have become increasingly common and sophisticated over the years.
Pros of Cyber Insurance
Cyber insurance has an extensive number of benefits. The basic premise is its payout in case there is a data breach within your infrastructure. Other benefits include:
- Coverage for legal fees and public relations damage control
- Support with risk management and incident response
- Access to cybersecurity experts
Understanding the full extent of the benefits you may receive is an essential step when selecting cybersecurity insurance. The benefits can vary depending on the service you choose. More specifically, some policies only cover damages from attacks that are technological in nature. This can leave you unprotected from social engineering attacks, for example.
Cons of Cyber Insurance
While cybersecurity insurance can provide peace of mind, there are also some drawbacks. This can include:
- High premiums for certain industries
- Difficulty obtaining coverage if your security measures are not meeting standards set by the cyber insurance provider
- Limitations on payouts and coverage
There are countless horror stories of cyber insurance companies not paying out due to a discrepancy in the policy that was overlooked. This could provide many cons if the policy isn’t looked over adequately, including the coverage limitations.
The most important thing you should do when looking for cybersecurity insurance is thoroughly read and understand the policy.
Why Your Los Angeles Organization Needs Cyber Insurance
Cybersecurity insurance is not a guarantee against cyber attacks, but it can provide financial support in the event of one. This can be a lifesaver for businesses, as the average cost of a ransomware breach is $4.54 million. This cost can fluctuate depending on the type of data breach, which means it can go up or down.
Although there are cons to cyber insurance, these cons greatly depend on the depth of your research, which ultimately makes the pros greatly outweigh them.
Understanding how to get the right cyber insurance and who you can trust will save you from future financial damage and stress.
Praxis Can Help
Praxis specializes in cybersecurity and can assist businesses in selecting the right coverage for their needs as well as assembling a comprehensive cybersecurity plan that meets insurance providers’ requirements. Our team of cybersecurity experts can also help ensure your systems meet the necessary criteria for your cyber needs.
It’s important to us that you not only receive proper cybersecurity insurance but that you receive the payout you deserve in the event of a ransomware or cyber attack.
Set up a meeting today for more information on cybersecurity at Praxis.