In the third in our series about essential insurance for your tech startup we take a look at cyber insurance.
In an increasingly digitalised world, the prevalence of cybercrime is a concern for businesses across the spectrum. However, for tech startups navigating the complex landscape of Web3, the risk of cyberattack is heightened. We give you the lowdown on the benefits of cyber insurance and offer guidance on finding a policy to suit your unique business needs.
Cyber Insurance: What is it?
Cyber insurance is specialist insurance that protects businesses from financial losses resulting from cybercrimes including data breaches, identity theft, ransomware, social engineering attacks, DDoS attacks, malware, phishing and cyber extortion. As technology evolves, new threats and tactics are emerging and even the most tech-savvy businesses can find that their robust security measures are not impervious to attack.
The financial consequences of cyber-related risks and incidents can be disastrous. Cyber insurance is designed to transfer these risks to the insurer and provide a level of financial protection against the costs associated with cyber threats.
Key features of cyber insurance typically include coverage for:
- Data breach response: Swift access to experts such as IT forensic specialists and legal advisers, as well as costs related to investigating and mitigating a data breach, including notifying affected individuals and managing public relations.
- Data loss and restoration: Expenses associated with the recovery and restoration of lost or compromised data.
- Cyber extortion: Coverage for ransom payments in the event of a ransomware attack, as well as expenses related to negotiating with cybercriminals.
- Business interruption: Reimbursement for lost income and additional expenses incurred due to a cyber incident that disrupts normal business operations.
- Cyber liability: Protection against legal costs and liabilities arising from third-party claims related to a cyber incident, such as lawsuits for failing to protect sensitive customer information.
- Network security liability: Coverage for damages and legal costs resulting from a failure to protect computer systems or networks, leading to unauthorised access or data breaches.
- Media liability: Protection against claims of defamation, libel, or slander resulting from the publication of content on digital platforms.
Policies will vary from insurer to insurer including some areas of coverage being restricted (sub-limited) depending on the type of business or how robust their cybersecurity controls are.
Cyber Insurance: Why do tech startups need it?
The greater a company’s reliance on digital technologies the greater the potential of falling victim to cybercrime. Tech startups working within the Web3 landscape rely heavily on digital networks and platforms, increasing the likelihood of a cyberattack. In addition, fledgling companies often have limited resources which can result in weaker cybersecurity measures compared to larger, more established companies.
Bear in mind too that Asia Pacific accounted for 31% of global cyberattacks in 2022. Asia’s rapidly evolving digital economy and technology is a magnet for bad actors, upping the risk for startups operating in the region.
When should you consider Cyber Insurance?
Given the current surge in cybercrime, particularly in the APAC region, cyber insurance is becoming increasingly important in protecting all businesses from the potential costs of a cyberattack.
We generally advise companies to integrate cyber insurance into their risk management strategy from the outset. Some choose to align this decision with securing a first major client or when the workforce reaches 10 employees but consider what damage could be done before these milestones are reached if you are unlucky enough to fall victim to an attack.
How can Continuum help tech startups?
Whether you are just about to launch or your startup already has an established customer base and operational processes, Continuum can help you navigate the complex world of cyber insurance as part of a comprehensive risk management strategy.
The specific coverage and limits provided by cyber insurance policies vary, so it’s important for businesses and individuals to carefully review policy terms and conditions. Continuum is a cyber insurance specialist and we can answer any questions that you have.
In order to tailor a cyber insurance policy to the requirements of your business, we will assess several factors including your business activity, security controls, financial controls, the value of any physical assets you own and the extent of coverage that you require. With the explosion of cyberattacks in recent years, any insurer will want to see proof of robust cybersecurity protocols and we can advise on certain aspects such as security audits and employee training.
As your company grows, we can verify that your cover remains aligned with your needs and ensure that you avoid the common issue of under-insurance. And of course, should you fall victim to an attack, we’ll be with you every step of the way to guide you through the claims process and minimise the impact on your finances and your business operations.
For a free assessment of your Cyber Insurance needs, why not call or email us to schedule a chat?
