Cyber insurance a must for digital wealth

A question often posed by many people is: can digital assets — data, digital media, the computer and network infrastructure — be insured? My usual response is; why not?

Given the speed at which technology and data are spreading and deepening their roots, insuring digital assets is not only a noble idea, but an immutable strategy.

Loss of data due to a server outage, for example, can momentarily or permanently cripple a business, leading to colossal losses.

If a fire burns down your office, you probably won't be up and running for weeks or months. Property damage risks like fires or burglary threaten your servers, backups, and other physical data storage devices.

The cyber bad boys are on the prowl, looking for digital fault lines which they often exploit.

Such losses could bring about a slump in productivity, raise data-recovery costs, cause reputational damage or could harm a long-standing customer relationship.

SAVING GRACE

The inconveniences associated with lost opportunities and potential lawsuits when a client’s information on your network is lost can be far-reaching.

In situations like these, an insurance cover can be your saving grace.

It can make a huge difference in meeting the costs of losses and could help turn around an organisation that would have otherwise sunk. It is an invaluable strategy for insulating start-ups against crippling losses.

Cyber insurance policies can also give businesses access to qualified recovery specialists, who can help them bounce back from an incident rather than having to rely solely on their in-house staff, who may not be quite up to speed on recovery procedures.

Setting up a cyber liability cover can be a complex calculus. To set up a policy, the insurer will most likely want to know the risk management plan of an organisation.

They may want details about the age of an organisation’s technology, data access practices for employees, and the frequency of staff trainings to uphold good data management practices.

DATA HYGIENE

An insurer will most likely want to know the anti-virus and malware detection programmes in use.

Inasmuch as an insurance cover is a great strategy, good digital data hygiene practices must be observed. Always back up your data so that in case of a loss, a copy of data is available for use.

If you back up data on hard drives, always store a copy in an offsite location. That way, in case of a fire, flood or theft, you can access a copy of your data.

If you store sensitive data, make sure it's encrypted. A stolen hard drive with non-encrypted data could be read and data compromised.

If feasible, take advantage of cloud-based backup services but do not allow your service provider to access and read sensitive information.

The confluence of technology and data makes the new centre of gravity for many organisations.

Organisations should spare no effort to protect their data — including investing in insurance covers.

Wambugu is an informatician. Email: [email protected] @samwambugu2