Cybersecurity Insurance Pros and Cons: Is it the Best Policy?

Cybersecurity Insurance Pros and Cons: Is it the Best Policy?

Cyberattacks can cause major loss of revenue for businesses and other groups of all sizes. As a result, cybersecurity insurance is being discussed more and more. The prospect of getting money back after an attack becomes increasingly appealing. But, is it right for every organization? What are the pros and cons? Who already has it? And, who needs cybersecurity insurance? 


The New World 


A Sophos survey found that 84% of its 5,000 respondents have a cybersecurity insurance policy. This service is sometimes also called cyber-liability insurance.


A report by cybersecurity insurance provider Zurich North America and Advisen Ltd. found that the specific risks managers want to insure against include: 


Bricking (when a cyberattack renders a device unusable) – 72% 
Contingent business interruption – 72%
System failure – 70%
Funds transfer fraud – 66%
Social engineering – 66%
Internet media liability – 63%
Reputational harm – 60%

More than half of companies surveyed (55%) bought a standalone cybersecurity insurance policy, while 13% acquired it as part of a larger policy. 


The Zurich and Advisen survey found that insurance coverage purchases have more than doubled since 2011. This is connected in part to the pandemic, which increases the potential for ransomware attacks and major business disruptions. Both the chance and the cost of an attack are higher now than ever. 


Cybersecurity Insurance Cons


There could be some downsides to insurance.


1. Inadequate coverage: Sophos found that many of the cybersecurity insurance policies their survey respondents have aren’t adequate for the job. For example, only 64% have insurance that covers ransomware, one of the best reasons to have coverage in the first place.


2. Attacks ..

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