Does Your Business Have Cybersecurity Insurance?

Updated on September 04, 2024

Did you know that the first step in taking out cyber risk insurance is to make sure your business has implemented suitable security measures?

In recent years, cyberattacks have increased at an alarming rate. Simply assuming that their business is immune to such threats could turn out to be a business leader’s biggest mistake.

Indeed, any business can fall victim to such threats. A successful scam can not only impact operations and cause significant financial losses—it can also seriously damage business reputation.

A business can nonetheless limit damage by taking out cyber risk insurance. This type of coverage, relatively new to the market, helps mitigate the multiple consequences of a business’s computer systems breach.

Implement the necessary measures

However, to be allowed to purchase insurance that covers cyberattack risks, a business must first implement suitable and effective security measures.

Adopting such measures is necessary: given the explosion of cyberattacks and claims, insurers offering coverage against cyberattack risks no longer commit to insuring vulnerable businesses.

1. Determine the security risks

The first step is to determine what security risks your business is exposed to.

2. Implement core processes

You should then plan and implement basic anti-cyberattack core processes such as:

3. Train and raise awareness among employees

It is also important to continuously train your business’s employees to make them aware of IT security risks. This will enable them to adopt the right behaviours and take effective action to avoid attacks or limit the damage. Very often, cybercriminals sneak in through people’s accounts or emails to achieve their objective.

Main types of insurance coverage

Cyber risk insurance may compensate a business for such things as:

Keep in mind that, as with any insurer’s risk-financing measures, compensation is subject to specific conditions and policy exclusions.

Law 25 and ISO 27001

Businesses may hire external firms to implement cybersecurity solutions. These firms’ expertise offers businesses peace of mind: they know that they are better protected in the event of a cyberattack, and that they meet the security standards and basic criteria for purchasing insurance coverage.

It is worth noting that Law 25, passed last fall by the Québec government, requires businesses to protect the personal information they hold. This new law is inspired by the General Data Protection Regulation, which came into force throughout the European Union in 2018.

ISO 27001 is also proving to be an excellent barometer for identifying potential risks and demonstrating that a business has implemented appropriate measures to manage the security of its information and data.

Of course, all these measures combined cannot guarantee that a business will be fully protected against cyberattacks. Still, the above safeguards greatly reduce the risks and consequences of such attacks. The effectiveness and compliance of the measures you implement will allow your business to take out cyber risk insurance and gain peace of mind.