New cyber threats are evolving almost every day along with insurance concepts.
However, it is clear that the cyber insurance policies available on the market pursue different objectives: some providers look primarily to cover damage and losses caused by a business interruption resulting from a cyber incident, while others focus on liability cover for a claim based on data breaches. Only focusing on the price of different products can lead to nasty surprises in the event of damage. In addition to the suitable scope of cover and an adequate risk premium, it is also important to choose the right sum insured for cyber insurance.
Before taking out cyber insurance, we recommend that you identify and quantify your own cyber risks within the company and define a strategy for risk management. Our buyer’s guide shows how you can use the GrECo cyber risk assessment to make the best possible decision in terms of cyber insurance.
Step I: Identification of the company cyber risk
The cyber risks of a company, such as cyber attacks, data breaches or IT errors of employees, are diverse. Companies must first of all face the challenge of identifying these risks. Here are some examples of the most significant risks for most businesses: data risk, operational risk, criminality risk and reputational risk.
The most significant cyber risks for companies
Step II. Determining the adequate sum insured
If the company’s cyber risks are identified, we recommend qualifying and quantifying these risks. Cyber risks can also be prevented or at least reduced in most cases by specific risk management, but a residual risk almost always remains. The residual risk of a potential major loss is covered by cyber insurance. Choosing the right sum insured and deductible commensurate with the risk involved can be a challenge. The evaluation approach must be chosen, based on the risk type. The evaluation of the loss potential resulting from data theft follows approaches other than the evaluation of a business interruption following a cyber attack on IT infrastructure and key systems. The insurance market currently has sufficient capacities, even if high sums insured are required as is the case with multinational companies. The specialists of GrECo Risk Engineering are on hand to help you prepare loss potential analyses for cyber risks. Read the article “Identify your risks. Don’t burn your money.”.
Step III. Evaluation of cyber resilience
Cyber resilience is a comprehensive strategy for enhancing the resistance of a company’s IT systems to cyber attacks. International standards such as ISO 27001 or the cyber security framework of the international standardisation authority NIST offer recognised models for establishing, implementing, examining and continuously improving the company’s own cyber resilience.
But it is not appropriate to introduce these standards for all companies. These certifications are often too complex and cost-intensive, especially for SMEs. However, cyber security services such as cyber penetration tests, awareness training courses and cyber scoring reports are available to help SMEs to build up their cyber resilience.
The cyber scoring report allows companies to establish their digital footprint quickly and cost-effectively. Leaked, publicly available company data (e.g. email addresses, passwords, user names, etc.) is searched for during a desktop scan of the internet and darknet. The result of the report shows the company’s digital footprint, from which it can be concluded how the employees move in cyberspace, how visible the company is for cyber attacks (reputation in cyberspace), whether recent attacks can be detected, etc.
Cyber insurance ultimately safeguards corporate assets …
The awareness of the possible loss potential is an essential requirement for the decision on an insurance solution and its characteristics. Cyber resilience safeguards material and immaterial corporate assets and supports the purchase of cyber insurance in terms of quality and price.
As every minute counts with cyber damage, cyber insurance also offers important services such as immediate telephone protection, an IT expert network, and legal and PR support in order to overcome the cyber incident in the best way possible and prevent a negative impact on the company’s reputation. After the crisis has been overcome, cyber insurance takes responsibility for first-party and third-party liability losses.
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