Cyber security insurance
What is it?
Cybersecurity insurance, or “Cyber-Versicherung”, is an increasingly important form of coverage in the digital age. It’s designed to mitigate the financial impact of a wide range of cyber risks such as data breaches, cyberattacks, and system failures.
Given the surge in cybercrime rates and increasing regulatory scrutiny, this form of insurance is no longer optional but a necessity for businesses of all sizes.
In the German market, there are numerous insurance providers offering varying degrees of coverage, making it crucial for policyholders to carefully evaluate their cyber risk exposure and opt for a policy that suits their needs.
What are the benefits?
Cybersecurity insurance is adaptable and often customizable to the specific risks of your business. Standard packages usually cover legal fees, notification costs, and even PR efforts to manage reputation damage. Additional options might offer coverage for business interruption, ransom payments, and third-party damages.
Understanding the ins and outs of your policy is extremely important, given the fast-evolving nature of cyber threats and the potentially crippling financial consequences of an attack.
Data breach
- Coverage: Covers the costs associated with a data breach, including legal consultations, customer notification, and credit monitoring services for affected parties.
- What’s not covered: Breaches resulting from gross negligence or non-compliance with cybersecurity best practices may not be covered.
- Premiums: Depend on the scale of data handled and the existing cybersecurity measures in place.
Business interruption
- Coverage: Compensates for lost earnings due to system downtime caused by a cyber event.
- What’s not covered: Losses from interruptions due to physical disasters or general system maintenance.
- Premiums: Calculated based on estimated lost revenue and operational impact.
Ransomware & extortion
- Coverage: Covers costs related to ransom payments and the services of cybersecurity experts to mitigate the attack.
- What’s not covered: Ransoms paid without the insurer’s consent may not be reimbursed.
- Premiums: Optional and may significantly affect the overall cost of the policy.
Competition is big among German insurance providers specializing in cyber risks, with many offering bundled services or discounts for businesses with robust cybersecurity measures.
Who is it for?
Cybersecurity insurance is vital for businesses, institutions, and even freelancers who manage digital assets, personal data, or online services. Premiums and coverage can vary based on the nature of your operations, the quality of your existing cybersecurity infrastructure, and your industry’s regulatory landscape.
It’s advisable for organizations, small or large, to consider cybersecurity insurance as part of a comprehensive risk management strategy.
Did you know?
~ 27%
Percentage of the companies in Germany stated that they had already taken out cyber insurance. [3]