The explosion of e-commerce and data-oriented businesses has increased significantly the need for data security and cyber insurance. Data is now the backbone of many businesses. Therefore, it must be protected like any other asset to avoid significant losses or legal action following a breach of privacy agreement.
CYBER OR DATA SECURITY
What is cyber insurance?
Cyber insurance aims to protect companies against Internet-related risks. More specially, it protects against risks related to information technology infrastructure and activities. These risks are usually not covered by professional indemnity policy or commercial general liability insurance.
Cyber insurance provides first-party coverage against losses due to data destruction, extortion, theft or hacking. The policy indemnifies the company against legal lawsuit following a breach of private information or defamation as well as expenses incurred to recover data, provide security audit, or post-accident public relations and investigations expenses. The policy may also cover criminal funds reward if requested.
What is the maximum cover you should have?
Since it is a new risk, it is hard to estimate the real exposure of any business and set a maximum cover. For SMEs with low risk exposure, insurers will offer pre-underwritten coverage with various maximum insure, and select the amount that seems reasonable in regards to the costs you may face in case of such event.
How much does it
Cyber insurance is usually an extension of a professional indemnity insurance or a business owner’s package. The price, of course, varies a lot depending on the type of business and volume of data that is being managed. The area of coverage is also an important factor as local regulation plays a major role in potential liability claims following the loss of private data.
What is the impact of GDPR law for business in Asia?
General Data Protection Regulation (GDPR) is the new legal text that is in effect since May 2018. It is meant to protect individual data of European citizens and is only applicable to companies that are collecting personal data from European citizen. This regulation gives people the right to know what information is being collected from them and what it will be used for. It will also help individuals sue companies if there is any breach of confidentiality.
Is it compulsory?
Cyber insurance is not a compulsory insurance but more and more companies will require this insurance in their contract with their suppliers.