Five worthy reads is a regular column on five noteworthy items we’ve discovered while researching trending and timeless topics. This week we are exploring cyber insurance, how it can help businesses in the event of a cyberattack, and why it is necessary for your organization.

In a key bulletin published in August 2022, Tony Chaudhry, the Underwriting Director of Lloyds, addressed the risk posed by cyber security threats to the insurance industry, stating that “losses have the potential to greatly exceed what the insurance market is able to absorb”.

Cyber insurance is a specialized insurance policy that was created to protect businesses from the losses that can occur as a result of cyber attacks. The size of your business does not matter when it comes to needing cyber insurance, and it shouldn’t be your only priority when it comes to your business’s cybersecurity. Read on to learn more about cyber insurance coverage and its cost.

Cyber insurance is a necessity in today’s cybersecurity landscape, especially in the wake of widespread ransomware attacks on commercial businesses of all sizes. A cyber insurance policy enables companies to transfer the cost of recovering from cyber incidents. In the event of a data breach, your cyber insurance policy can cover the costs of damages to others, profits lost if your network goes down, and the cost of negotiating ransomware.

It’s no secret that loss control programs are essential for cyber insurance. Unlike other forms of insurance where the risk and assets don’t change much during a policy term, cyber insurance is meant to mitigate a constantly evolving risk and cover organizations whose security posture is always changing. A cyber insurance policy could be priced completely differently today compared to a few weeks or months later.

Cyber insurance (also cyber liability insurance coverage or cyber risk insurance) is a type of insurance policy that helps organizations cover financial damages related to cyber attacks or data breaches. Cyber insurance is especially important as the cost of a data breach continues to rise, and the amount of cyber attacks is higher than ever.

The increase in successful cyberattacks driven by both an explosion of ransomware activity and a series of high profile zero-day vulnerabilities, is forcing cyber insurers to further scrutinize the companies they insure and the policies they offer.

Seeking to stay ahead of hackers, many researchers have asked themselves what drives cyber risk. And many cyber insurance carriers have wondered how to accurately underwrite and price the risk. According to preliminary results from SecurityScorecard’s joint work with our cyber insurance partners, the answer is clear but multi-faceted.