In today’s digital landscape, companies face constant challenges related to cybersecurity, i.e. protecting their data and systems. Cyber Risk insurance has emerged as a crucial solution for companies to protect themselves from cyber incidents such as data breaches, ransomware attacks and unauthorized access.
From small businesses to large organizations, dependence on digital infrastructures has increased exponentially, bringing with it a proportional increase in cyber risks. As a result, cybersecurity is no longer an option. It is now a necessity for companies of all sizes and sectors.
With the growing sophistication of cyber attacks and the high costs associated with security incidents, companies are looking for increasingly robust solutions. In 2023, more than 40% of companies invested in digital coverage, demonstrating the evolution of awareness about the importance of cybersecurity.
Cyber Risk insurance has emerged as an essential solution for mitigating financial losses resulting from cyberattacks. For companies wishing to protect their operations and maintain customer confidence, this insurance has become indispensable.
A worrying reality is that more than half of Portugal’s small and medium-sized enterprises (SMEs) reported some kind of cyber-attack in 2024. These incidents represent financial losses and reputational damage and compromise the continuity of operations. According to recent information released by ECOseguros, more than 40% of companies already use cyber insurance as a protection measure.
In this article, you will understand the importance of cybersecurity and learn about the benefits of Cyber Risk insurance for companies.
What is Cyber Risk Insurance?
Cyber Risk insurance aims to protect companies from financial losses associated with cyber-attacks. This solution can cover costs related to the recovery of compromised data, repairs to damaged systems, legal expenses, regulatory fines and reputational damage.
When a cyber incident occurs, such as a data breach or a ransomware attack, the insurer offers immediate support. Let’s think about a practical case. Imagine that a hotel suffers a cyber attack, resulting in the exposure of customers’ credit card data.
his data, in turn, is used to withdraw money from customers. The hotel, because it doesn’t have the proper protections in place, could be held liable for the damage caused. But the situation can be different. If the hotel has contracted Cyber Risk insurance, this acts as a safety net, protecting it from the financial impacts of the cyber attack. In this case, the insurer can cover legal defense costs, customer notification costs, financial losses and other expenses associated with the incident.
Still not sure what benefits this insurance can bring to your company? Keep reading.
Benefits of Cyber Risk insurance for corporate cybersecurity
Cyber insurance offers the peace of mind that all companies need, protecting them from various threats. Here are some of the benefits of this solution:
- Protection of confidential data
Organizations are able to recover compromised information and restore systems that have been affected by cyber incidents.
- Risk management
Cyber insurance acts as an extra layer of protection, minimizing the impacts of a possible attack.
- Quick responses
In the face of a security breach, every minute counts. Cyber Risk insurance offers efficient incident response services, allowing companies to act quickly to contain the problem, minimize damage and get operations back on track.
- Protecting a company’s reputation
A company’s reputation is a precious asset that can be quickly destroyed by a cyberattack. The way a company quickly recovers from a cyberattack allows it to preserve its credibility in the market.
- Legal protection
Compliance with laws and regulations is an important aspect of cyber insurance. In Portugal and the European Union (EU), regulations such as the GDPR (General Data Protection Regulation) and the NIS 2 Directive impose strict digital security requirements. Failure to comply can result in significant penalties. Cyber insurance helps companies comply with these requirements, ensuring that organizations are prepared to face audits and other regulatory challenges.
How to strengthen cybersecurity and prevent cyberattacks?
Although insurance is essential, prevention is also necessary. Regular system updates are essential to correct known vulnerabilities. Training employees in this regard is equally important, because, according to data revealed by ECOseguros, “around 95% of security incidents occur due to human error, such as clicking on phishing links or sharing passwords”.
Another way of preventing cyber incidents is by making frequent data backups. This way, information can be recovered quickly in the event of loss or corruption. Encrypting sensitive data, investing in certified and up-to-date software, carrying out regular audits of security systems, multi-factor authentication and using strong passwords also help to protect your assets and ensure business continuity.
In short, cyber insurance represents a commitment to security and guarantees data protection and operational continuity for companies in an increasingly digital world. Contact us to find the best solution on the market.
