What is cyber insurance?
Cyber insurance can provide assistance and compensation for digital incidents, such as a hack, data breach or ransomware. Think of system recovery, incident support or legal aid. Which damage is covered depends on the policy, security conditions and exclusions. Loss of turnover or damage to third parties is not automatically included in every package.
Is cyber insurance necessary?
Whether you need cyber insurance depends on your digital risks. The government advises entrepreneurs to determine how much damage they can bear. Consider costs for recovery, legal assistance and lost sales. The more your business works digitally the greater the consequences in the event of an incident. Some clients expect you to have cyber security in place. Cyber insurance is not mandatory but it is wise if a cyber-attack would bring your work to a halt or if your company does not have enough reserves to cope with that damage. Ask yourself a few questions. Can you work without a laptop or systems for a week? Can you pay legal fees yourself in the event of a data breach. If you cannot say yes, cyber insurance is relevant.
Business and private
Do not assume that a personal policy covers your business incidents, or vice versa. First check what your existing business insurance already covers and excludes. Compare which risks remain and what damage you can bear yourself. A separate cyber policy does not provide complete protection against every incident.
What is covered?
Cyber insurance consists of several components that together help to limit damage and recover quickly after an incident. The following components may be insured; check your policy for each component.
- Recovery of systems and data, such as restoring files and removing malware
- Technical support in cleaning up and rebuilding your digital environment
- Legal help with liability and obligations around data breaches
- Support in communication towards customers and other stakeholders
- Guidance on reporting a data breach to the regulator
- Compensation for damages to customers adversely affected by the incident
- Coverage of lost sales when your business temporarily shuts down
You choose which package suits your operations and digital risks.
Additional covers
Extra cover often includes 24/7 help. You get access to technical experts who think along directly. Some insurers offer training to be more aware and secure online. You can also get help with digital research after an incident. This allows you to see what happened and how to prevent it.
Risks for self-employed professionals
As a freelancer, you often have less digital security than larger businesses. Because of this, cybercriminals can target you more easily. Think of ransomware that blocks your files. Phishing that steals money or data. A data breach that harms your reputation. Many attacks are automated, meaning you can become a target without anyone specifically choosing you. The damage can consist of missed assignments, recovery costs and loss of time. If you do not have backups, an incident can have long-term consequences. Cyber insurance can help with this within the agreed cover. Fictional scenario: your schedule and client files are temporarily inaccessible. Note which activities grind to a halt, what recovery costs and whether you can continue working with a backup. Then ask which parts of this scenario the policy covers.
Cost of cyber insurance
The premium depends, amongst other things, on your activities, turnover, security and chosen cover. Request quotes with the same insured annual amount, excess and the same cover for business interruption. Have it stated separately which incident assistance is included and which security conditions continue to apply. Compare the total annual premium and any additional costs; a low premium without comparable cover says little.
Cyber insurance comparison
Compare the policy on specific components. The NCSC questions help you with the consideration.
| Section | Question to the insurer |
|---|---|
| Incident assistance | Who is reachable and when? |
| Damage to your own business | What repair costs and maximum amounts apply? |
| Business interruption | Is loss of turnover included or optional, and as from when? |
| Liability | What damage to others is covered? |
| Security | What requirements must I meet beforehand and during the term? |
| Costs and limits | What are the annual premium, the excess and the limits per component? |
Compare the answers with your own scenario and existing insurance policies. Ask for clarification if an exclusion or coverage limit is not clear.
Applying for cyber insurance
You apply for cyber insurance when you want to cover your digital risks. Before your application, you check your security. Insurers expect basic measures such as antivirus software and backups. Some insurers have you complete a questionnaire to assess risks. Then you choose a package and request a quote. You read the terms and conditions and check exclusions. When you agree, you take out the policy. In the event of an incident, you contact the emergency service immediately. Keep the policy and premium invoices safe with your administration so that they are also available in the event of an incident. Read also how VAT and tax deductions for insurance work.
