Data insurance is a great way to safeguard your company from data breaches and any other form of lost data, especially if the data in question is sensitive and valuable. Data insurance (or cyber-insurance) is becoming more prevalent and can be directly related to the increase in the amount of data that we store in the cloud, and the importance we place on the security of this data. It is a very significant component to include in a company’s business continuity or disaster recovery plans. Taking out a monetary insurance policy against the potential financial implications of data loss can soften the blow if tragedy strikes.
But just taking out a cyber-insurance policy is not enough to protect your company against the repercussions of data loss. Data insurance is just one aspect of protecting against a data disaster. There are other factors to take into consideration when protecting data.
Defining Data Loss
When insuring your company against data loss, the types of events that could lead to it are categorised:
Unintentional Action – Such as Human Error. It is frightening how many data loss cases can be ascribed to human error, but as the saying goes: Errare humanum est, sed in errare (errore) perseverare diabolicum – to err is human, but to persist in error (out of pride) is diabolical. It is therefore important to have a comprehensive disaster recovery plan in place, and to not persist in the error of being negligent about data security.
Failure (System Failure). Let’s face it, things break. Servers become corrupted, power outages happen, systems and networks crash – these are all things beyond our control, and difficult to ignore, yet easy to be prepared for.
Natural Disaster. Floods, fires, hurricanes – nature can be unpredictable and one should not be caught off guard and unprepared.
And lastly, Crime. Cybercrime is on the rise, and probably one of the most feared and most damaging causes of data loss. Be it an employee stealing data, hackers infiltrating your system to gain access to data, or ransomware holding your data hostage; cybercrime is a very good reason to invest in data insurance. With cybercrime comes the risk that the data lost will also be exposed publicly or sold through online black markets, making this a very delicate situation to deal with and becoming a victim of an attack liable to various legal implications. Without being insured against cybercrime, this type of data loss could be very difficult to navigate.
The True Cost of Data Loss
Most companies are not aware of the true damage that data loss can inflict. Monetary loss is par for the course during times of business downtime, legal battles, statutory fines, to name a few. It is surprising how quickly inaccessible or missing data can ruin a company.
Aside from the financial implications, the reputation of a company can be damaged, especially if the organisation handles very sensitive customer data. It can lead to long term loss of business, and this can be very difficult to recover from. While data insurance is probably a good idea, it is perhaps best to consider alternatives to better safeguard your data. Cloud-based backups can be an all-encompassing solution that prevents reputational damage, business downtime and permanent loss of data. It is good to be insured, it is better to be prepared.
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The recent ransomware attack on Kaseya, a cloud-based IT and security management provider services company that supplies tech-management tools to customers worldwide, has the potential to be the most serious cyber-criminal incident this year.