While many businesses are taking steps to up their cybersecurity, some lingering misconceptions about cyber insurance are leaving many underinsured. In this article, we look at the truth behind some common myths about cyber insurance.

“Cyber insurance is only for companies that handle customer data”

Even if your business doesn’t collect customer information, you’re still likely to hold sensitive data elsewhere. For example, your employee records may include bank details, home addresses, and sometimes medical histories – all of which are invaluable to cybercriminals.

“Our IT systems are good enough, we don’t need cyber insurance”

While strong IT security is essential, it isn’t a substitute for cyber insurance. Cyber threat is constantly evolving, and attackers are always looking for new ways to infiltrate the most sophisticated of cyber security systems. While security teams work hard to keep up, cybercriminals are doing the same, refining their methods every day.

There’s also the risk of human error. It only takes one click on a phishing link or one misdirected email for a cybercriminal to get into your systems.

“We outsource our IT, so we’re covered”

Outsourcing IT doesn’t remove cyber risk. In fact, many attacks don’t involve breaching a technical system at all. They instead rely on social engineering, tricking employees into handing over sensitive information.

Even large, well-known corporations have fallen victim with some of the biggest losses in history caused by social engineering.

Many IT service providers include clauses in their contracts to limit their liability in the event of a breach. That means if something goes wrong, your business could be left with the repercussions. Cyber insurance can help by providing crisis management support and financial protection for associated losses.

“We’re covered under our general business insurance”

While some traditional business policies offer limited protection against cyber risks, they’re rarely designed to fully cover modern digital threats.

Cyber threats have consistently ranked among the biggest risks facing businesses in recent years. As technology continues to evolve, the tactics used by cybercriminals are becoming more complex. Terms like ransomware, phishing, and deepfake scams are now common threats that standard policies may not be equipped to handle. Cyber insurance has been designed specifically to protect against cyber risk.

“Cyber insurance is too expensive”

The cost of cyber insurance may vary depending on the nature and size of the business.

Rather than wondering if cyber insurance is too expensive, it’s worth thinking about the financial impact of a cyberattack. Putting aside the direct costs like system repairs and legal fees, there’s the potential damage to your reputation. Could your business afford that risk?