How does cyber insurance work — and why don’t all companies have it?

Understanding Cyber Insurance: Insights and Challenges

The realm of cyber insurance is becoming increasingly critical as businesses face more frequent cyber attacks. Many large companies are investing in cyber attack coverage, but a recent analysis suggests that the terms of these policies can leave businesses with significant gaps in protection.

Coverage Gaps in Cyber Insurance

While major corporations often have robust cyber insurance policies, those policies can come with a wide range of exclusions. These exclusions may create uncertainty regarding payouts in the event of a cyber attack. For instance, incidents stemming from human error or specific types of malware may not always be covered. This can leave companies in a tough spot when they need support the most.

Who is Affected?

This situation affects companies of all sizes but is particularly concerning for small to medium-sized enterprises (SMEs) that might assume broader coverage than what is actually provided. Many businesses may be unaware of the limitations in their policies, which could result in unexpected financial repercussions following a cyber incident.

The Need for Awareness

As cyber threats increase, companies are encouraged to conduct thorough evaluations of their insurance coverage. Understanding the specific exclusions in their policies can help businesses make informed decisions and potentially seek additional coverage to fill in the gaps. Educating employees about cyber risks is also part of a comprehensive strategy.

Conclusion

The conversation around cyber insurance is evolving, underscoring the importance of not just having coverage, but knowing what it entails. As more companies navigate this complex landscape, clarity and proactive measures will be key to minimizing risks and financial impact.

Original Source: https://www.ft.com/content/84daf2c6-db11-491a-af5e-ca9cd1007316