Cyber Insurance and why it is Important

On Friday, April 3 2020, Prime Minister Lee Hsien Loong addressed the nation to say that the government is introducing new ‘circuit breaker’ measures in order to slow the community spread of Covid-19. The resounding message: stay at home and leave only for essential services.

Circuit breaker measures were to start on April 7 and end on May 4, 2020. However, it was announced on April 21 that the measures were to be further extended by another 4 weeks until June 1, 2020. In such a situation, business owners are facing pressures and they need to recoup the losses from the shutdown. Newly registered small and medium-size enterprises (SMEs) can now get more help with digital solutions during the early stages of their businesses through a new initiative called Start Digital.

It offers them digital solutions in areas such as accounting, human resources, digital transactions, digital marketing platforms, and cybersecurity.

What Is Cyber Insurance

Cybersecurity insurance, also called cyber liability insurance or cyber insurance, is purchased mainly to provide coverage for individuals against losses resulting from data breaches or loss of electronically stored information. It can also extend to corporations that are also at risk of losing confidential client data through the hacking of their internal database systems.

Why Cyber Insurance is important

The loss, compromise or theft of electronic data can have a negative impact on a business, including the loss of customers and revenue. Businesses may be liable for damages stemming from the theft of third-party data. Cyber liability coverage is important to protect businesses against the risk of cyber events, including those associated with terrorism. Cyber-risk coverage can assist in the timely remediation of cyberattacks and incidents.

In 2018, The personal data of 1.5 million patients in Singapore has been hacked in the country’s largest cyber attack, SingHealth and Singapore’s public healthcare sector IT agency IHIS have been slapped with S$250,000 and S$750,000 financial penalties, respectively, for the July 2018 cybersecurity attack that breached the country’s personal data protection act.

What it covers
  • Business interruption loss due to a network security failure or attack, human errors, or programming errors
  • Data loss and restoration including decontamination and recovery
  • Incident response and investigation costs, supported by a 24/7 multilingual incident reporting hotline and on-demand vendors
  • Delay, disruption, and acceleration costs from a business interruption event
  • Crisis communications and reputational mitigation expenses
  • Liability arising from failure to maintain confidentiality of data
  • Liability arising from unauthorised use of your network
  • Network or data extortion / blackmail (where insurable)
  • Online media liability
  • Regulatory investigations expenses
Who needs cyber insurance?

Businesses that create, store and manage electronic data online, such as customer contacts, customer sales, PII and credit card numbers, can benefit from cyber insurance. In addition, e-commerce businesses can benefit from cyber insurance, since downtime related to cyber incidents can cause a loss in sales and customers. Similarly, any business that stores customer information on a website can benefit from the liability coverage that cyber insurance policies provide.

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