The Business Case for Investing in Quality Cybersecurity Insurance
Mitigating the Financial Cost of a Breach
While proactive security measures (firewalls, training) prevent attacks, cybersecurity insurance provides a financial safety net when an attack succeeds. As ransomware and BEC (Business Email Compromise) attacks increase in Canada, this insurance is becoming an operational necessity.
What Cyber Insurance Covers
- **First-Party Costs:** Covers direct costs incurred by your business, such as data restoration (from backups), forensic investigation costs, business interruption losses, and the cost of notifying clients/data subjects (required under the DPPA).
- **Third-Party Costs:** Covers costs related to legal action from clients or partners whose data was compromised (fines, penalties, and legal defense fees).
- **Ransomware Negotiation:** Some policies cover the cost of professional negotiators and, in some cases, the ransom payment itself (though this is increasingly regulated).
Note: Insurers will require you to demonstrate that you have implemented essential security protocols (e.g., 2FA, regular backups) before they issue a policy. Insurance is not a substitute for security, but a complement.