The global cyber security insurance market size was around USD 9.30 billion in 2021 and is anticipated to surpass USD 38.9 billion by 2030, expanding at a compound annual growth rate (CAGR) of 19.54% during the forecast period, 2022–2030. This growth is attributed to the increasing adoption of cyber insurance due to rising digitization at a rapid pace across the globe and the technological development in the IT industries and social media platforms.
What is Cybersecurity Insurance?
Cybersecurity insurance is a type of policy that can be purchased by individuals or organizations to reduce the financial risk associated with the business. Cybersecurity insurance is also known as cyber liability insurance which provides coverage options for small businesses to protect from cyber-attack or internet-based risk.
What is Cyber-attack?
Cyber-attack is an attempt to damage or destroy a computer network system or computer software by hackers with some malicious activities to theft data. It happens when hackers try to gain illegal access to electronic data or a network system. It includes the theft of valuable data that may harm to a business or a person.
Types of Cyber Insurance
There are two types of cyber insurance which are as follows:
- First-party cyber liability coverage: It helps individuals to cover all expenses, incurred due to data breaches or hacks.
- Third-party cyber liability coverage: It provides liability protection for individuals that fail to prevent data breaches. It helps to cover all expenses associated with a data breach or hack leading to data theft and financial losses of clients.
Cyber Insurance Benefits:
- Cyber insurance specially designed for individuals or organizations that ensures safety against cyber-attacks such as phishing, identity theft, email spoofing, privacy & data breach, cyber stalking, and another malware attack.
- Cyber insurance helps victims of cyber-attack by covering defense costs, prosecution costs, and other minor expenses.
- It protects the organization from data breaches such as credit card numbers, account numbers, and other malicious software attacks.
- It also protects against the risk of privacy, security, operational, and service risk.
Who is responsible for a cyber insurance policy?
The IT department is responsible for designing cyber insurance policies. A cyber insurance policy is a written document, which includes a set of rules or standards that describes roles and responsibilities in the organization for encryption of email attachments and restrictions activities on the use of social media. It includes guidelines for creating passwords and explains the rules for accessing online applications and internet resources for end-users.
Cyber Security Regulations:
Cyber security regulations safeguard information technology (IT) and computer system. The main purpose of the regulations is to force companies and organizations to protect their systems from cyber-attacks such as viruses and phishing.
Cyber Risk and its benefits:
- Cyber risk is the loss of availability of information or data and reflects the impact of potential adverse to the organizational operations. It is depending on a system that exists in cyberspace.
- Cyber risk insurance helps an organization by providing security and privacy events. It covers all expenses, lost due to data breaches, viruses, and other malicious activity.
Is Cyber Insurance mandatory?
Cyber insurance is a good idea for most companies as it provides coverage against account numbers, passwords, data breaches, credit card numbers, social security numbers, sensitive customer information, health records, etc. It helps to cover expenses and legal costs associated with a data breach or cyber-attack. Therefore, cyber insurance is mandatory.
Key Takeaways:
- Cyber insurance helps to reduce the financial risk associated with the business.
- Cyber insurance ensures safety against cyber-attack.
- Cyber-attack is an attempt by a hacker to destroy a network system.
- Cyber insurance is mandatory to reduce cyber-attack.
