Cybersecurity: Insurance for the digital world

cyber security
Insurance for the digital world

According to the digital association Bitkom, the German economy suffers about 230 billion euros worth of damage every year as a result of cyber attacks.

According to the digital association Bitkom, the German economy suffers about 230 billion euros worth of damage every year as a result of cyber attacks.

© IMAGO / Panthermedia

Cybercrime is a growing threat in a digitized world and the best way for companies to insure themselves against attacks from the Internet is to take out cyber insurance. It is best for individuals to extend their legal protection

Companies are increasingly in the crosshairs of cybercriminals. With the rise of the home office and mobile work, many experts assume that cybercriminals will have even more entry points. The financial costs and reputational damage to German companies are enormous. Therefore, it is worth taking out comprehensive cyber insurance. But not only companies suffer from growing cybercrime. Individuals are also increasingly exposed to it.

Entrepreneurs seem to be well aware of the dangers that lie ahead: 76 percent of midsize businesses consider the risk of cyberattacks to be high. This is demonstrated by a study by the General Association of the German Insurance Industry (GDV), which the Forsa survey institute conducted among 300 medium-sized companies in Germany. Despite the general awareness of the risk, respondents consider it unlikely that it will affect them: only a third rate the risk of cybercrime for their own company as high. True to the motto: risk yes, but not with us. But the data shows: One in four medium-sized companies in Germany has already been the victim of a successful cyber attack. “Many German companies have IT security gaps and are not adequately protected against cyber attacks,” says GDV CEO Jörg Asmussen.

According to the digital association Bitkom, the German economy suffers about 230 billion euros worth of damage every year as a result of cyber attacks. Cybercriminals most often attack businesses with so-called ransomware to extort ransom. Attackers gain access to company storage media and encrypt all data on it; owners can no longer use them. Once all systems are brought to a standstill, entire companies are brought to a standstill and sensitive data can be released as well. Therefore, the expert Asmussen says: “Cyber ​​insurance is essential for any company whose business model is based on IT.”

Cyber ​​insurance comes into play in an emergency and covers the costs associated with a cyber attack. “In an acute situation, the crisis service provider is there to help the client immediately and provide first aid,” explains Asmussen. Computer forensic experts analyze the attack and take care of evidence preservation and damage limitation. Public relations specialists try to minimize damage to the company’s image with rapid crisis communication. The insurer also covers costs resulting from business interruption or data recovery and system reconstruction. Some policies also ensure ransom payments.

Important also for individuals

For cyber insurance to take effect, companies must have certain security requirements. This includes regular data backups and authorization levels configured in the system, so that not all employees have administrator rights, for example. But even with good IT protection, businesses are not completely protected against cyber attacks. Because every computer security defense, however good it may be, has a weak point: people. The most common attacks are caused by human error, such as when employees open malware-laden email attachments. Cyber ​​insurance is therefore also worthwhile for companies with their own IT department and supposedly good protection. “Employee negligent behavior and operational errors are also insured,” says insurance professional Asmussen.

Internet protection is also important for individuals: According to Bitkom, eight out of ten people in Germany have been victims of Internet crime in the last twelve months. However, before individuals take out their own cyber insurance, they should verify their existing insurance coverage. Because many standard policies already cover damage that occurs in virtual space. If you unintentionally forward a virus to other people, private liability will cover any resulting damage.

Classic legal protection insurance also covers contract disputes when shopping online. Important: Here, the insurance generally only applies if the online store is located in Germany or Europe. Claims such as removal of uploaded images or compensation claims for pain and suffering in case of cyberbullying can also be claimed through legal protection insurance. And those who attach great importance to even more comprehensive online protection can often extend their legal protection policy. “With additional cyber modules in legal protection insurance, assistance and services in particular offer added value,” says Asmussen.

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