Cyber insurance shopper checklist: Things to consider before hiring these services

Information security related incidents have become so common that any organization, whether it is a major multinational company or a small business, must consider any possible protective measures against disastrous consequences that, a data breach, for example, can cause.

Cybersecurity incident insurance policies have
become a widely used option over the past year. However, there are multiple
variables that parties interested in these products should consider before
contracting such a service, as a hasty decision can result in a mistaken
purchase.

According to information security experts, one
of the key aspects to consider before hiring a cybersecurity policy is to
analyze liability coverage, in other words, that insurance covers any costs
generated by a hacking incident or data breach. These costs can result from
first party incidents (occurring in the company itself) and third party incidents
(related to any external company or individual).

Specialists believe that an appropriate
protection plan should contain at least the following points:

  • Legal
    fees: Costs to cover legal representation fees for the affected company
  • Digital
    forensic fees: If your company was the victim of a data breach or security violation,
    you will need to hire third-party forensic experts to conduct an independent
    investigation; this is one of the most important aspects to consider, as these
    services are not economical
  • Notification
    fees: This is the investment required to notify each user affected by a
    cybersecurity incident about the status of their personal information; almost
    any data protection legislation demands that this step be met
  • Business
    disruption costs: In some cases cybersecurity incidents seriously disrupt
    operations in a company, so having a policy to mitigate this financial impact
    is critical
  • Costs
    of protection to affected parties: A data breach victim company should provide
    protection to every affected user; this protection includes bank status
    monitoring services and protection against identity theft
  • Fines
    for non-compliance: Affected companies may receive fines or penalties
    established in accordance with the data protection legislation of each country
    or region (such as the GDPR, which applies throughout the European
    Union
    )

There are many insurance policies on the market
that offer coverage in these fundamental aspects, however, information security
experts point out that the amount of coverage can widely vary depending on each
insurance company. In addition, company executives (especially small and
medium-sized businesses) should consider that purchasing one of these services,
even the most basic plans, is really expensive, so they should make sure
they’re not paying for services that they don’t really need.

Last but not least, information security
specialists from the International Institute of Cyber Security mention that
there are many situations that could void a cybersecurity policy. For example,
if a company stores its users’ data in an unsecure location, it is safest for
the insurer to negate the policy, so all costs must be covered by the affected
company. It is essential to have adequate IT infrastructure, as well as correct
cybersecurity policies and practices before hiring these services; before looking
for others to correct your mistakes, make sure you don’t fall into them.

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