As a CISO or cyber security professional, the risks of cyber attacks are some of the top concerns or risks that keep you up at night. It is understandable that you would consider different solutions to mitigate these risks, including cyber insurance. This option sounds like a good one since it promises to be a safety net in case of a cyber attack. However, before you rush to sign up for cyber insurance, there are some crucial things you should know. In this blog post, we will unpack the cybersecurity insurance industry, what it entails, and whether or not it is a scam.
First, it is important to note that cyber insurance exists allegedly for the insured. Cyber insurance covers things like financial loss, legal fees, and compliance with data protection regulations. So, what is the problem with it? The problem is that the insurance is not comprehensive, and it often does more harm than good. Insurance companies are headed by business people, and their goal is to make money. They sell insurance policies that are designed to protect themselves in case of a cyber attack, not you or your clients. Therefore, you still have a significant risk of suffering losses because the insurance company may not pay out in your hour of need.
Furthermore, cyber insurance providers have been known to induce their clients into making risky decisions. For instance, insurance companies tell clients they are covered in case there is a ransomware attack, but then encourage them not to pay the ransom. This decision can be very damaging, as it may result in permanent data loss. While the insurance company may argue that it sought to protect its interest by not paying the ransom, you will still be at risk of long-term impacts of losing your data.
Moreover, insurance companies do not have the same level of experience and expertise that cybersecurity firms have. Cybersecurity firms can help you safeguard your infrastructure against cyber attacks. They have the right tools and expertise to detect and neutralize threats. They also have experience dealing with cyber attacks, which cannot be said for insurance companies. Therefore, it would be more prudent to secure a cybersecurity firm than secure cyber insurance.
Lastly, we cannot overlook the fact that cyber risk insurance policies are very complex. The terms and conditions contained therein can be challenging to understand. This means that you may end up paying for a policy that you do not actually need. On the other hand, you may believe that you are covered for a particular type of cyber attack, only to realize later that you are not. This lack of clarity creates confusion, and you may not fully understand what you are signing up for.
In conclusion, cyber insurance may seem like a good investment to mitigate risks, but in reality, it is not the best option. Insurance companies are not cybersecurity experts, and their policies can be complex, leading to confusion and errors. Instead, focus on working with cybersecurity firms that can help you establish protective measures against cyber threats. Cybersecurity firms have the knowledge, tools, and expertise to guard your infrastructure against cyber threats. Ultimately, it is advisable to invest in the services of an expert who can implement robust protective measures and effectively defend your infrastructure against cyber threats.