Do I need Cybersecurity Insurance?

Do I need Cybersecurity Insurance?
Published Sep 21, 2021

Yes.

Every company from the big Fortune 500s to the one-woman consulting firms should have cybersecurity insurance. Period.

Cyber attacks happen fast. And when an attack happens, you only have so much time to stop the bleeding, assess legality and pay (or not pay) ransom, so you can get back to work and repair the damages.

There is a lot to do and with cyber insurance, it’s addressed by the experts quickly.

What does Cybersecurity Insurance cover:

  • Hands IT forensics
  • Manages the legal term
  • Oversees ransom pay out
  • Can even cover lost profits

How Cyber Attacks happen and how to fix them?

Cyber Attacks happen because there is an opening in your digital environment that hackers take advantage of. They are able to write code that accesses your site or simply use a password that they have guessed or have purchased on the dark web. Most companies have at least one password for sale on the dark web; there is really no way to prevent it from happening.

Attackers steal sensitive information and threaten to expose it, potentially putting your clients and business partners at risk. Or hackers deny you access to your own databases, encrypting your data in such a way that your business stalls.

When a cyber attack happens, you need a specialized team to isolate how the hackers got there, secure your site and re-establish connection to your information if it was lost. An IT department can help prevent cyber attacks and backup information so nothing is completely lost, but an IT department and a forensic team that specializes in counteracting cyber attacks are two separate teams. You do not need a forensic team until you need one, and your cyber attack insurance will coordinate this team on your behalf.

Negotiating ransom with cyber hackers: is it legal to pay?

A legal team that specializes in cyber attacks would be provided to you by your cybersecurity insurance. The legal team will manage the conversation with the hackers.

You want to be sure to respond in a timely manner as hackers will increase their ransom after a set time frame.

You also want to make sure you are not committing treason by paying a ransom. The United State and the European Union, among other state entities, have published a list of hackers you cannot legally pay because paying would disobey international sanctions.

Having a legal team manage these conversations that has a fluent knowledge of the laws surrounding ransom payment is necessary.

Paying the ransom

Lots of hackers ask to have their ransom paid in a very specific way. Most request untraceable digital currencies such as Bitcoin. The hackers will send these beautiful, almost sweet service emails that describe how you need pay, where you can get Bitcoin, etc. The hackers may offer to help, but may also insist that the payment be made quickly or they’ll double the ransom.

Your legal team and insurance company will handle negotiation.

We Live Security has written more extensively on the topic of paying cyber attack ransoms.

Cover the loss of revenue

Depending on how long it takes the forensic team to fix the data breach and decrypt your database and how long it takes the legal team to negotiate and pay the hackers, you and your business could be sidelined for a week or so.

That’s why cyber attack insurance can even cover the loss of revenue during the ordeal.

How much does cyber insurance cost?

$1M of coverage is $3,500 or more.

Prices for cyber insurance have compounded recently due to the increased number of cyber attacks and the increasing price of ransoms. Even with the inflated cost (and the subsequent difficulty to get and meet the standards of insurance) it is still recommended that you get cyber security insurance.

You should also still have an IT department on retainer to help prevent a cyber attack from ever happening. As cyber attacks are more and more frequent and more and more dangerous, you may find that IT companies will not work with you unless you have cyber insurance, and cyber attack insurance firms may not represent you if you do not have an IT provider on retainer.

For full service IT support, contact XL.net today

IT services can help reduce your risk for cyber attack by up to 80%.

Small- to medium-sized businesses often make the mistake of thinking they are too small to be hacked, but that’s simply not true. They are frequently targeted and often have much more risk than big companies since the effects of a security breach tend to be more damaging. Plus, outside hackers aren’t the only threat to a business — human error is another big concern.

As a trusted cybersecurity services company in Chicago, XL.net can help with all of these issues and more. We provide comprehensive cybersecurity solutions to SMBs as part of our managed IT and technology alignment services.

Contact us today to get started assessing your cyber security.

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