Cyber insurance

In today’s digital landscape, businesses face a growing number of cybersecurity threats – from social engineering to ransomware attacks – that can result in significant financial and operational damage. That’s where cyber insurance comes in.  

in this article you'll learn what cyber insurance is for, what it protects against, and how 1Password Extended Access Management can lower your insurance premiums.

What is cyber insurance?

Traditional insurance policies don’t typically extend to the digital world. Cyber insurance, or cybersecurity insurance, is a specific type of insurance policy that protects businesses from financial loss caused by cyber attacks, data breaches, and other security incidents. 

Like most insurance policies, cyber insurance transfers at least part of the financial responsibility from the policy holder to the insurance company. If a cyber crime were to occur, the insurance company assists the business with financial damages that fall under the scope of their policy.

There are two components to cyber insurance: first-party and third-party coverage. First-party cyber insurance typically covers an organization’s expenses that result from a cyber incident. That might include legal fees and the cost of restoring your data and business to normal operation. Third-party coverage, just like it sounds, covers damages your organization may have to pay as a result of claims or lawsuits from affected entities like customers or partner organizations.

You should especially consider cyber insurance if you store any kind of sensitive data (customer PII, payment details) or have particularly limited tolerance for downtime, no matter the size of your business. Small and medium businesses are becoming big targets for hackers, so you can’t assume you’re safe if you own or work for a startup.

There are various coverage levels available from a variety of insurers so it’s a good idea to shop around. Compare carriers and policies, and find something you can tailor to your business, and its needs and risk profile.

Why is cyber insurance important for security?

It might seem obvious but cyber insurance and security are very closely related. While cyber insurance won’t make your organization more secure, security certainly influences cyber insurance. In short: The more secure your infrastructure and controls, the lower your cyber insurance premiums will be.

Carriers will consider your organization’s industry, revenue, and breach history, and look closely at its overall security posture. There are a number of ways to improve that security including: using firewalls and endpoint protection; having segregated data backups, strong access controls, and encryption; implementing multi-factor authentication, an incident response plan, and employee training.

Bolstering your security to lower your premiums may seem like a (pricey) hassle, but you’ll have the added bonus of fortified defenses which will inherently decrease the likelihood of a breach and, in turn, your reliance on the policy.

How does cyber insurance relate to 1Password?

1Password doesn’t offer cyber insurance but it can play a significant role in improving your organization’s security and compliance posture, which in turn can reduce your premiums and help prevent claims against a policy.

1Password Enterprise Password Manager demonstrates you’re following best practices regarding credential storage. It also guards against credential-based attacks which have been one of the leading causes, if not the leading cause, of data breaches for years. 

For additional comprehensive coverage, the full 1Password Extended Access Management platform secures access across every identity, device, application, and AI agent without compromising usability for you or your team members.