What is cyber insurance and does a small business need it?
Short answer
Cyber insurance helps cover costs after an incident, such as investigation, recovery, legal advice, notification and sometimes business interruption. Whether you need it depends on your risk and contracts. Insurers usually require baseline controls such as MFA and backups before they will offer cover.
The details
Read exclusions carefully and ask what support comes with the policy, such as an incident response hotline. Insurance does not replace security controls; it pays part of the cost when those controls fail.
Terms explained
- Risk assessment
- A cybersecurity risk assessment identifies assets, threats and weaknesses, estimates likelihood and impact, and prioritizes how to treat each risk.
- Incident response
- Incident response is the organized process of preparing for, detecting, containing, eradicating and recovering from security incidents, then learning from them.
- Multi-factor authentication
- Multi-factor authentication (MFA) requires two or more kinds of proof to sign in, such as a password plus an app prompt, security key or biometric unlock of a passkey.
Sources
Related questions
- Where should a small business start with cybersecurity?
- How much should a small business spend on cybersecurity?
- Are small businesses really targeted by hackers?
- How do I train employees on cybersecurity without boring them?
- What security policies does a small business need?
- How do I secure Microsoft 365 or Google Workspace for a small business?
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