23rd March 2023

Tech News

Do I Need Cyber Insurance? And Is It Worth It?

Somerbys Cyber Insurance

This is a question we get asked a lot at Somerbys IT. So, to clear up any misunderstanding, we thought we’d write a quick article on why, YES, you should get cyber insurance! This can feel counterintuitive, because you have Somerbys IT constantly advising and guiding clients on the best way to survive the dark side of the digital world, along with providing a host of professional tools to help prevent and guard against cyber attacks.

So you might be asking yourself why you need cyber insurance on top of that. Let us explain…

You insure your house… why not your cyber?

The simplest analogy is home insurance. We all have this on our property to protect against theft and fire, but we also safeguard our homes with locks, burglar alarms, CCTV and smoke detectors. This is the same principle for cyber insurance. Just because we understand the risks and have all the tools in place to stay fully protected, it doesn’t mean we won’t get caught out one day!

What is cyber insurance and how will it help?

Cyber insurance is a special kind of cover that helps protect companies from digital risks that aren't usually covered by traditional insurance policies. It can help cover losses from things like hacking, data theft and even cyber-bullying. Plus, depending on the size of your business and insurance risk, some policies can come with benefits like regular security check-ups and even rewards for catching the bad guys. So, if you're a business in the digital world (which most of us are), cyber insurance is a must-have!

But how does it work?

Cyber insurance is most often offered on an annual basis, mainly providing two types of policies – first- and third-party cover.

With first-party cover, losses that directly impact your business alone are covered. For instance, when a cyber attack occurs on your own network, it covers the costs of restoring operations in terms of data recovery, business continuity and so on.

Third-party cover provides protection for a company that manages systems, networks software for others' data. These plans typically cover the loss of personally identifiable information and customer notification costs.

It’s interesting to know that very few of these policies actually cover physical damage or bodily harm that arise as a result of a successful cyber attack, but mainly protect against the monetary and material loss from the damage caused.

Will having a lower cyber risk help?

In essence, yes. To obtain cyber insurance at a lower cost, businesses need to maintain a low-risk score. The idea behind this is simple – the cyber risk for your business is a key factor used by the cyber insurance provider to determine the premium cost. Consequently, insurance companies extend higher insurance coverage (and lower prices) to resilient clients who are well-prepared for cyber attacks. To achieve a lower risk score, businesses need to have certain levels of protection in place, as well as some basic security controls, to strengthen defences against cyber attacks. This gives the insurance provider confidence to provide a lower-cost premium.

So, it’s important to have the right strategy!

At Somerbys IT, we promote a well-prepared proactive strategy, which includes adopting the latest cyber security tools, as well as ensuring industry best practices like encryption, strong password policies, and of course, education and understanding surrounding potential threats.

If you have any concerns around this or would like more information on getting staff training on potential threats, let us know and we’ll be happy to help.

Still need more information?

At Somerbys IT we are not allowed to give advice or guidance on the most appropriate insurance policies or best brokers to use. But the National Cyber Security Centre (NCSC), a UK government agency, has a great article to help if you are considering getting cyber insurance – click here.

Remember, if you need any help or have any concerns about your own data security, please do get in contact.