Different types of cybersecurity insurance

What is cyber insurance and why do you need it?

Cyber insurance (also known as cyber risk insurance or cyber liability insurance) is a type of insurance coverage that applies to the victims of cyberattacks. It protects companies and individuals from financial consequences that may arise in the case of personal or customer data breaches, system hacks, social engineering attacks, and other types of cyber threats. Since the number of cyberattacks has significantly risen over the last few years, cybersecurity insurance has become a growing need along with additional investments in enhanced cybersecurity measures.

Types of cyber insurance by coverage

You can get at least several different kinds of cyber insurance coverage. However, based on coverage, two of the most common are first-party and third-party insurance options.

• First-party cyber liability insurance. Helps cover financial damages sustained during cyberattacks that occur on your own network or systems.
• Third-party cyber liability insurance. Helps pay for lawsuits that occur because of cyberattacks on a client’s network or systems.

Other cyber insurance types can include errors and omissions, network security, data breach, incident response, or supply chain risk insurance. These cyber insurance options cover more specific branches of cybersecurity offering targeted protection against various risks and liabilities that organizations or individuals may face.

The pros and cons of different (business and individual) cyber insurance types are listed below.

While business cyber insurance policies cover a broader set of potential cyber threats, individual cyber insurance policies provide aid when dealing with the damage sustained during more personal cybersecurity breaches, such as a stolen IP address, or identity theft.

Choosing the right cyber insurance policy

When looking for the right cyber insurance option, you should consider a few key factors that can help you find the best policy that suits your needs.

• Risk assessment. Evaluating your potential cyber risks will help you avoid underinsurance and payments for policies that you may not need. Businesses and individuals experience different cyber threats which is why performing a thorough risk assessment would be a useful first step before choosing a cyber insurance policy.
• Coverage scope. Once you’re familiar with potential cyber threats, finding the policy that covers them all can help you ensure the best protection possible.
• Claim service. In case of a cyber incident, a fast and reliable response can be crucial. Therefore, when looking for the best cyber insurance company, consider the service that provides maximum support with minimal finance or business interruption.
• Exclusions. Familiarize yourself with exclusions that come with each cyber insurance coverage, to avoid unpleasant surprises or gaps in coverage when you file a claim.
• Price. Some of the cyber insurance policies can be expensive. When looking for the best option, consider the cost-effect relation. It is also important to remember that the price shouldn’t be the sole determining factor when choosing a cyber insurance policy.

Enhance your defense against cyber risks with Nord protection

While cyber insurance coverage helps mitigate the damage of potential cyberattack, investing in cybersecurity solutions should be the primary goal for any business or individual. To fortify yourself against potential phishing attacks, data leaks, and other cyber threats, consider using a VPN service that will provide an extra layer of security to your online connection.

With its renowned VPN service, NordVPN’s cyber protection benefits (such as the NordLocker file vault) along with the Incogni personal data removal tool can offer individuals enhanced prevention against phishing attacks, encrypted VPN connections and file storage, and a safer overall browsing experience.