In the wake of recent data breaches, healthcare organisations and financial institutions are turning to cyber insurance to offset costs associated with cyber-attacks and data breaches. According to a recent Moody’s Investors Service report, as reported by Health IT Security, the healthcare industry potentially faces the greatest financial impact from cyberattacks, due to their heavy reliance on technology for data storage.
As data sharing increases, the healthcare industry, in particular, will need to safeguard its interests from cyberattacks with Cyber Security Insurance.
What is Cyber Insurance?
Cyber Insurance, also called Cyber Liability Insurance, covers a variety of both liability and property losses that may result when a business engages in various electronic activities and their security is compromised. Cyber insurance generally covers your business’ liability for a data breach involving sensitive customer information, such as credit card numbers, medical/health records, license numbers, and account numbers (etc.).
Depending on your specific needs, cyber and privacy policies coverage may include covering:
- Company liability for a data breach in which the firm’s customers’ personal information is exposed or stolen from the firm’s electronic network.
- Notification costs and credit monitoring.
- Costs to defend claims by state regulators, fines and penalties, and loss resulting from identity theft.
- Costs associated with cyber ransomware and negotiations.
What is Ransomware?
According to a report published by Llyods of London, “global ransomware attacks could cost businesses almost AED 734bn (USD 200bn),” with the healthcare industry among the most affected (AED 92bn). Despite the high costs to business, the report shows the “global economy is underprepared for such an attack with 86% of the total economic costs uninsured, leaving an insurance gap of AED 610bn (USD 166bn).”
Despite the repeated warning about email phishing campaigns, email remains the most prominent method for cyber criminals to deliver malware and ransomware. Ransomware is a malicious software built to revoke access to a computer system until a ransom is paid. Ransomware can spread in a variety of ways, including:
- a phishing email that appears as a legitimate link, image, or invoice
- a visit to an infected website
- a visit to an ad containing malware than has been inserted into a legitimate website
When unsuspecting users open an email containing ransomware, or they accidentally fall victim to an online trap containing ransomware, the virus is silently installed on the victim’s computer. Once the ransomware infects the victim’s system, they will be locked out until they pay the required ransom to the cyber-criminal. Once the ransom is paid, the victim may receive a pop-up screen containing a private decryption key that will unlock the scrambled files.
Cyber Security Insurance and Overall Security Strategy
While cyber liability insurance will not prevent a data breach from occurring, investing in cyber liability insurance is essential if you store sensitive data online. Regardless of the age, size, industry, or number of clients your company possesses, cyber liability insurance will protect your assets in the event of an electronic data breach.
If you are interested in learning more about cyber insurance to protect your company in the event of a cyberattack, contact a member of our team today.