The Business Case for Investing in Quality Cybersecurity Insurance
Mitigating the Financial Cost of a Breach
While proactive security measures (firewalls, training) prevent attacks, cybersecurity insurance provides a financial safety net when an attack succeeds. As ransomware and BEC (Business Email Compromise) attacks increase in United States of America USA, this insurance is becoming an operational necessity.
What Cyber Insurance Covers
- **First-Party Costs:** Covers direct costs incurred by your business, such as data restoration (from backups), forensic investigation costs, business interruption losses, and the cost of notifying clients/data subjects (required under the DPPA).
- **Third-Party Costs:** Covers costs related to legal action from clients or partners whose data was compromised (fines, penalties, and legal defense fees).
- **Ransomware Negotiation:** Some policies cover the cost of professional negotiators and, in some cases, the ransom payment itself (though this is increasingly regulated).
Note: Insurers will require you to demonstrate that you have implemented essential security protocols (e.g., 2FA, regular backups) before they issue a policy. Insurance is not a substitute for security, but a complement.