Cover Your Assets! Why Cybersecurity Insurance Has Got Your Backside

Photo by CC user Gabriel Nunez on Flickr.

Are your financial assets really safe? The fact is that security threats are increasing all over the globe and occurring on a daily basis. Cyber criminals are no longer only targeting large corporations, but also individuals and small businesses. A recent PWC report ‘The Global State of Information Security Survey: 2015’ indicated that cyber security incidents grew at a faster pace than mobile phones in 2015.

Figures released in a Dell study titled ‘Protecting the Organization Against the Unknown – A New Generation of Threats’ further emphasize the importance of enhanced cyber security. According to the study, nearly three quarters of the organizations that participated in the survey had experienced a security breach within a year. Only 18 percent of these companies had considered learning more about the threats to deter them and considered security a top concern.

Cyber security threats to financial assets

If you think that your financial assets are safe, consider the following threats.

Takeovers of accounts

This is one of the most common targets of cyber criminals. This is because a lot of personal information is now accessible to them. Cyber criminals take over accounts with the aim of transferring funds or processing fraudulent payments.

Breaches of third party payment processing

If your business involves online payments, then this is something you should be on the lookout for. Millions of dollars have been lost as a result of third-party payment processors being compromised. Customers’ personal information is used by cyber criminals to access their accounts, credit cards and debit cards and fraudulently transfer money.

Exploitation of market and securities trading

Brokerage and securities firms are a common target for cyber-attacks. Cyber criminals hack these firms and try to manipulate the market or trade unauthorized stock. Millions of dollars can be lost through small shifts in the market.

Point of sale and ATM breaches

Technology has advanced to the degree that cyber criminals can collect personal identification numbers and card numbers using various devices from point-of-sale terminals. This information can be used to withdraw money or make fake payments. The release of this information also means that accounts are compromised.

How cyber security insurance can help

According to CyberPolicy,any and all organizations need cyber security liability insurance. This is because all organizations today rely heavily on networked systems for communication, storage of data and other tasks.

It is common for organizations to believe that cyber security breaches will never affect them. However, as statistics show, they can happen to just about any organization.

Cyber security insurance is a great way to transfer your financial risk to an insurer in case of a security breach.

There are different types of coverage you can opt for:

1. First-party coverage

This type of policy covers your liability. It provides coverage for expenses resulting from damage to your digital assets, interruptions to your business as a result of security breaches as well as harm to your reputation.

2. Third-party coverage

This policy covers the cost of your liability as well as legal defense in case of lawsuits, compensation, fines, penalties, customer notifications, investigations, public relations as well as credit monitoring.

Companies stand to lose millions of dollars in compensation and penalties resulting from breaches of security. Companies lose even more money in the long term due to the harm that these cyber security breaches cause to their reputations. The long-term expenses are difficult to quantify, but are much harder to recover from.

Cyber security insurance allows you to pay a small amount now in order to avoid paying a large sum and risking your assets in the future. In this age of digital thievery, it’d be wise to add up your assets and see how you can best protect yourself against a cyber security setback.