7 Reasons Why Your Company Should Have Cyber Insurance 

1. Covers Incident Investigation Costs 

After a security breach, the first step is to identify the cause and scope of the attack. This requires hiring specialized cybersecurity firms, whose services are often extremely expensive. Cyber insurance covers these costs, allowing you to react quickly and limit the damage. 

Case Study 1: 

A small e-commerce business becomes a victim of a ransomware attack. Hackers encrypt all its data and demand a ransom. Instead of paying, the company activates its cyber insurance policy, which covers the cost of hiring digital forensics experts. The specialists manage to decrypt part of the data and identify the vulnerability used by the attackers. 

2. Funds Data and System Recovery 

If data has been compromised or destroyed, restoring it can require significant time and resources. Cyber insurance helps recover lost data and rebuild compromised systems, minimizing business interruption. 

Case Study 2: 

A software company suffers an incident in which its customer database is deleted. The cyber insurance policy covers the cost of recovering data from backups as well as additional measures to strengthen security. 

3. Covers Loss of Income from Business Interruption 

A cyberattack can halt your operations for days or even weeks, causing substantial financial losses. Many cyber insurance policies include business interruption coverage, enabling you to maintain financial stability while your systems are restored. 

Case Study 3: 

A large travel agency’s website is taken offline by a massive DDoS attack at the peak of the season. The insurance policy covers the lost booking revenue accumulated during the outage. 

4. Covers Customer Notification and PR Costs 

In the event of a personal data breach, GDPR requires you to notify affected individuals. This includes sending letters, emails, or publishing official statements. Crisis PR is also essential for restoring trust. Cyber insurance covers these costs, including PR fees and legal consultations. 

Case Study 4: 

After personal data belonging to thousands of customers is stolen from a major retail chain, the insurer covers the costs of a large-scale PR campaign and legal services to notify affected individuals and restore customer trust. 

5. Covers Regulatory Fines and Legal Expenses 

Data protection violations can result in significant fines from regulatory authorities, as well as lawsuits from affected customers. Cyber insurance can shield you from these financial burdens by covering fines and legal fees. 

Case Study 5: 

A fintech company suffers a security breach that compromises customer data. As a result, it is fined by the national data protection authority. The cyber insurance policy covers most of the fine and the associated legal expenses. 

6. Provides Access to an Expert Response Network 

Most cyber insurers maintain a network of specialized partners, including cybersecurity firms, lawyers, and PR agencies available 24/7. Fast, coordinated incident response is crucial during a crisis. 

Case Study 6: 

After a successful cyberattack on a medical center, the insurer immediately engages a team of experts who quickly isolate the issue, minimize damage, and restore access to patient medical records. 

7. Includes a “Media Liability” Clause 

This clause typically protects you from financial losses related to legal claims arising from the content you publish (including online). The insurer covers all costs and amounts you may be required to pay if sued for: 

• Defamation and disparagement: Publishing or distributing false statements that harm the reputation of a person or company. This includes libel, slander, and product or trademark disparagement. 
• Intellectual property infringement: Unauthorized use of copyrighted materials, trademarks, designs, domain names, and similar assets. Coverage may also include claims of plagiarism or failure to properly attribute content. 

Cyber insurance covers both the damages you must pay to the claimant and all costs associated with your legal defense, including attorney fees and court expenses. 

Case Study 7: 

Imagine your company publishes a blog article using a former employee’s photo without permission, along with details from their personnel file. The employee sues for invasion of privacy and unlawful processing of personal data under GDPR. 
 With a “Media Liability” clause in place, the insurer covers: 

• The amount you are legally required to pay the former employee. 
• Your attorney fees and all other legal costs related to the case.