Cyber resilience has become a key priority for many businesses. Focusing on prevention isn't enough; the reality is that even well-fortified organisations are likely to experience attacks and breaches at some point.
True resilience, therefore, means being able to withstand, respond to and recover from an attack. In short, it's about preparedness so that you can minimise the operational, financial and reputational impact in the event that the worst happens. But financial preparedness often receives less attention, even though it can be the difference between a mild setback and a real catastrophe.
This is where cyber insurance plays a vital role in providing a financial safety net that allows businesses struck by cyberattacks to recover quicker and with real confidence. Let's take a more detailed look at how cyber insurance works as part of a broader strategy for resilience.
A vital layer of protection
Cyber insurance helps businesses manage the fallout from incidents such as ransomware and data breaches. Policies typically cover a range of direct and indirect costs, including incident response and investigation, legal advice, data recovery, and loss of income. Costs such as these can otherwise quickly spiral, which can be devastating (even fatal) for many businesses, especially SMEs.
While cyber insurance doesn't prevent attacks from taking place, it supports recovery, helping organisations get back on their feet faster and with less disruption. It's an integral part of resilience because it provides financial stability to continue operating during and after an incident. It thus helps to provide a safety net that allows businesses to remain functional even in the face of adversity.
Many SMEs still underestimate the potential financial impact of cyber incidents, assuming they're too small to be worth targeting. In fact, smaller organisations are often viewed by attackers as easy prey, while the cost of recovery can soon exceed available cash reserves.
Incorporating insurance into your resilience strategy
Building cyber insurance into your resilience framework begins with understanding your risks. Every organisation needs to have a clear picture of what it stands to lose in the event of a major cyber incident, both financially and reputationally. Once that's understood, decision-makers can evaluate the level of cyber insurance coverage that is appropriate.
Equally important is demonstrating that your security controls meet the expectations of insurers. Certification schemes, such as Cyber Essentials and Cyber Essentials Plus, provide a strong foundation, as they require firms to implement basic cybersecurity protections. This helps reduce the likelihood of an incident and makes it easier to secure affordable, comprehensive cyber insurance.
In addition, organisations with an annual turnover of less than £20 million also receive automatic cyber liability insurance with their certification (subject to terms and conditions). This provides protection up to a total liability limit of £25,000 and includes a 24-hour helpline for reporting cyber incidents, as well as crisis management and incident response services.
Insurance should also be looked at as part of incident response planning. The best cyber insurance policies provide access to breach response experts, legal advisors and technical specialists who can help to manage the immediate fallout of an attack or breach. Having this expertise to hand can significantly reduce recovery times and costs.
It's vital to remember that cyber resilience is not a one-off exercise. As your business grows and its needs evolve, so will both its risk exposure and insurance requirements. Regularly reviewing your cover, just as you would your cyber defences, helps to maintain an effective resilience strategy.
Common misconceptions
There are still misconceptions that prevent businesses from integrating cyber insurance into their resilience strategy. One of these is simply that smaller businesses don't need it. However, attackers are alert to this mindset and seek to exploit it, recognising that SMEs lack the resources of bigger businesses. Even a single phishing attack can result in insurmountable losses and costs.
There's also a tendency to assume that all cyber insurance policies are alike. In fact, cyber insurance can vary widely in scope, exclusions and claims support. Some policies offer comprehensive incident response support, while others focus more on financial reimbursement. Understanding the details of what is and what isn't covered is essential if you are to choose a policy that genuinely makes your organisation more cyber resilient.
It's also worth noting that the £25,000 of cover included with Cyber Essentials and Cyber Essentials Plus certification might not be sufficient for every organisation, or for larger incidents. Indemnity of £100,000 or £250,000 is available via IASME for an additional annual premium.
The final layer of cyber resilience
Cyber resilience is based on an understanding that while cyber incidents are inevitable, they can be recovered from. Prevention, detection, and response are all crucial, but cyber insurance provides a vital layer of financial resilience that helps businesses absorb the shock of an attack and emerge stronger in the long term.
For organisations that are serious about building lasting cyber resilience, therefore, insurance should be part of your strategy alongside vigilant monitoring, staff training and certification. A robust defence and recovery strategy builds confidence in your ability to withstand whatever cyberattackers might throw in your direction.
At Cyber Tec Security, our unique human-led approach helps more organisations get certified quicker. To find out more about how we can help your business achieve cybersecurity certification, get in touch with our team of experts today.
