Cyber Insurance: Smart Protection or Just Another Expense?

Get your cyber defence in place first, then consider cyber insurance

February 20, 2025

Dear reader

Cyber threats are one of the biggest risks facing businesses today, with data breaches, ransomware, and other attacks becoming more frequent and costly. In response, many companies are considering to cyber insurance as a safeguard against financial losses. But is it the right investment for your business?

At Du Pont, we implement  a multi-layered defence strategy to secure our clients IT environment against cyber threats. These are some of the tools we use:

  • Firewalls to block malicious traffic.

  • Monitor network traffic to detect suspicious activities.

  • Regular updates for protection from viruses, etc.

  • Security software is installed on all devices

  • Proper access control policies as this limits the potential damage of a breach.

  • Multi-Factor Authentication (MFA) to verify user identity..

  • Update and patch software 

  • Regular back ups for critical data.

  • Store backups securely (off-site or in the cloud)

  • Install advanced email filtering to detect and block phishing attempts, malware attachments, and other social engineering threats.

Prevent cyber criminals from entering your network

By combining these defences into a comprehensive security strategy, you can significantly reduce the risk of a cybersecurity attack. Regular testing, monitoring, and updating are essential to staying ahead of evolving threats.

But at the end of the day, it’s a bit like an electric fence around your property reduces the likelihood of theft, but doesn’t guarantee it, and many businesses take out insurance policies as an additional layer of protection. Cyber insurance is similar.  Du Pont Solutions doesn’t sell cyber insurance, but we help clients assess whether they need it and we help to fill out the requisite documentation.

What does Cyber Insurance cover?

It’s policy dependent, but it’s designed to help businesses recover from cyber incidents and covers expenses like:

* Incident response & recovery: Cost of forensic investigations, data restoration and system repairs.

* Business interruption losses: Compensation for lost revenue due to system downtime after an attack.

* Ransomware payments: Some policies cover ransom payments (though this can be a controversial aspect of coverage).

* Public relations and reputation management: Crisis communication support to mitigate reputational damage.

These benefits can provide significant financial relief after an attack, helping businesses recover more quickly.

 

Potential Drawbacks to Consider

While cyber insurance can be very valuable, it’s not a silver bullet. Challenges you should be aware of include:

* Strict security requirements: Many insurers require businesses to maintain strong cybersecurity measures, such as multi-factor authentication and regular security audits to qualify for coverage.

* Rising premiums: The cost of cyber insurance is increasing as cyber threats become more sophisticated.

* Complex claims process: Proving financial loss and meeting policy conditions can be complicated, leading to delayed or denied claims.

* Coverage limitations: Policies may exclude certain types of attacks, like insider threats or attacks attributed to nation-state actors.

 

Just like your premises, there’s no substitute for strong security: Cyber insurance should be viewed as a financial safety net, not a replacement for proactive cybersecurity measures.

 

Is Cyber Insurance Right for Your Business?

The best defence is a proactive cybersecurity strategy, with insurance acting as a financial safety net. Businesses that store sensitive customer information, rely heavily on digital systems, or operate in regulated industries may find cyber insurance particularly beneficial.

 

Conducting a cyber risk assessment can help you decide whether insurance is necessary or if your resources are better spent on strengthening your security measures.  This is where Du Pont Solutions can add value: we offer a security audit to help you with this assessment to make an informed decision.  If you’re interested, please reach out to us at [email protected] or contact Graeme directly.

 

There are no guarantees, but we can put you in a well informed and well protected position.

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