Yes, most businesses today need cyber insurance, especially those that rely on digital systems, store sensitive data, or operate online. While not a substitute for a robust cybersecurity strategy, it acts as a financial safety net to mitigate the costs associated with a cyber incident, which are often not covered by traditional business insurance. 

Key factors to consider when evaluating your need

Your digital footprint

• Do you use digital systems? If your business relies on computers, a website, a mobile app, or cloud services, you have a digital footprint and are at risk.
• Do you store sensitive data? If you handle personally identifiable information (PII), customer payment data, or proprietary information, a breach could lead to severe financial and legal penalties under regulations like the GDPR or India's DPDP Act.
• Are you part of a supply chain? Many cyberattacks exploit vulnerabilities in a company's third-party vendors to access larger targets. If you are a vendor, a breach in your system could have significant consequences for your partners. 

The potential cost of a cyber incident

• Breach expenses: A cyberattack can incur significant costs for forensic investigation, data recovery, customer notification, and public relations.
• Business interruption: If a cyber incident takes your systems offline, you will lose revenue and incur additional expenses to restore operations.
• Regulatory fines and legal fees: Data breaches often lead to expensive regulatory fines and legal battles with affected customers, partners, and regulators.
• Ransom payments: In a ransomware attack, cyber insurance can help cover the cost of a ransom payment and negotiations, although some policies are starting to limit or exclude this coverage.
• Reputational damage: A cyber incident can erode customer trust and cause long-term damage to your brand reputation, impacting your bottom line. 

Your current cybersecurity posture

• How robust are your defenses? Insurers will evaluate your existing security measures, such as firewalls, multi-factor authentication (MFA), and data backups, before offering a policy. Strong security can lead to lower premiums.
• Are you compliant? Failure to follow minimum security standards or address known vulnerabilities can lead to a denied claim.