The concerns around cybersecurity
continue to run high in today’s increasingly hyper-connected world. To put it in perspective, 2022 saw a three-fold increase in cyber-attacks
in India. While these risks are a uniform threat to everyone in an organization, they do pose a considerably high risk to C-suite leaders or the CXOs. The vulnerability of C-suite leaders stems from the high volume of their responsibilities and the criticality of their role in an organization.
Without a concrete cybersecurity shield, it will remain a matter of time before a breach throws the company into chaos. Sometimes, despite the best safety measures, things might still go awry thereby exposing companies and leaders to unimaginable consequences. In such situations, cyber insurance comes to its rescue. Here is an understanding of how cyber risks impact C-suite leaders and how they can safeguard themselves.
Why C-Suite leaders?
Top executives are becoming more vulnerable to cyberattacks, which emphasizes the need for businesses to manage cyber-security risk more thoroughly. C-suite leaders are essential participants in the creation of cyber resilience because of their role in fostering learning, development, and change management.
For the many responsibilities throughout a business, especially at the top levels of leadership, cyber security training must be tailored. The type and scope of the cyber dangers executives confront, as well as the crucial role they play in their cyber security, must be made clear to them. This entails that they must shore up their network and cybersecurity defense against threats, viruses, and scams. Also, they must take adequate measures for disaster and crisis management in case something untoward happens.
How to mitigate losses due to cyber threats
Startups, Unicorns, MSMEs, MNCs, organizations,
or conglomerates who deal with products or services about security, net banking, app or mobile banking, virtual meet payments, or subscription services must ensure absolute cyber protection with insurance.
Policies differ in their coverage, but the majority of insurance policies offer protection from a variety of risks, including losses due to impersonation, network breaches, malware attacks, cyber terrorism and ransomware attack, media liability, phishing, data breaches, any third-party privacy violations, etc. Furthermore, this new-age solution insurance also covers crypto-jacking and hacking via AI (Artificial Intelligence), Machine Learning, and other Smart Web applications.
How does the coverage work?
First-Party Protection: This policy shields a company from financial losses sustained when engaging in fraudulent acts like a data breach or hack
Third-Party Protection: This policy offers protection to customers, suppliers, partners, and other parties in the event that a third party sues the business for permitting a data breach to take place.
What is covered? Economic costs or liabilities due to theft of corporate information, financial harassment via emails or chats, data alteration or deletion, cyber vandalism, or fraudulent fund transfers are brought under purview for further processing, Legal costs or costs related to crisis management are noted, Damages or penalization awarded by the Court are taken into consideration, Commitment to cover first-party losses that include forensic costs, privacy concerns, data restoration efforts, civil penalties, and fines as well as any cybercrime that interrupts the business and its financial flow.
What is not covered in a Cyber Insurance plan? Like all insurance plans, Cyber Insurance comes with certain restrictions that fall out of its purview of coverage, these include the policyholder's ongoing and uninsurable legal matters are not covered, the policy excludes coverage for property damage, any damage to tangible objects, including physical injury or death, is not covered, any fraudulent act that contravenes a rule or regulation, as well as dishonest or purposeful behavior, is not covered, hazards or injuries brought on by carelessness or a failure to take reasonable steps to protect sensitive data, such as credit and debit cards, bank accounts, etc. are also excluded, any infringement on a contract, a trade secret, a trademark, a registered patent, or intellectual property is not covered by insurance.
In a world where a cyber-attack is difficult to predict and evaluate, Cyber Insurance certainly paves the way to minimizing the damages and in turn reinforcing the belief amongst the various stakeholders that the company is cautious of the consequences that might emerge because of such possibilities.