Cyber ​​insurance for tradesmen

Industry 4.0: The consequences of a digital attack can be existential threats for businesses. Specialized cyber insurance policies promise protection. But what risks do they cover – and what should businesses consider when taking out a policy?

This article is part of the special topic Digital Crafts

The advancing digitalization brings many advantages for companies, but also poses new risks: According to a Bitkom study from August 2024, 81 percent of all German companies were Victims of data theft, espionage, or sabotage. The resulting damage reached a new high of 267 billion euros. Craftsmen are also increasingly becoming the target of criminalsSmall and medium-sized businesses are particularly attractive targets, as they typically have less sophisticated security mechanisms. The consequences can be serious – from extended business downtime to financial extortion and even complete data loss.

Digital emergency assistance


speed Cyber ​​insurance promises help against digital attacksDepending on the contract, they cover costs resulting from data loss, hacker attacks, ransomware extortion, or business interruptions. They also often cover Recovery of data and IT infrastructure as well as reputational and consequential damage They therefore function as digital protective shield for affected companies.

However, cyber insurance is no free pass for carelessness: Companies usually have to meet certain requirements. This includes a thorough inventory of the IT systems used and a functioning Security concept with antivirus programs, firewalls and protection software. In addition, software updates, backups, and employee training should be carried out regularly. Those who act proactively and document their actions usually receive a faster and better insurance coverageHowever, companies that act with gross negligence or have not implemented any basic protection risk losing their insurance coverage in the event of a loss.

Photo: © DHB-Grafik

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Weighing up costs and benefits


But for which companies is cyber insurance worthwhile? In principle, cyber insurance can be worthwhile for all tradespeoplethat process sensitive data or conduct business processes online. Especially for small businesses that do not have unlimited resources to defend against damage, insurance can be an important shield against existence-threatening digital attacks. The premium amount depends on the individual risk, the size of the company and the desired scope of benefitsSmaller businesses typically pay a low to mid-three-digit amount per year; larger companies can pay correspondingly more. It's important that premiums are always proportionate to potential risks.

Closer look at the conclusion


When taking out cyber insurance, companies should Check exactly which services are included – and which ones don’t. Coverage amount must be sufficientto cover even serious scenarios such as outages lasting several weeks. It's equally crucial to examine the exclusions in the contract: If certain types of attacks or scenarios are excluded, this can be problematic in an emergency. The contractual obligations – such as documentation and prevention – should also be read carefullyThis is the only way to avoid losing insurance coverage in the event of a claim. Another quality feature of cyber insurance is a comprehensive emergency service: Ideally, the provider a 24-hour hotline and provides IT experts, legal counsel, and crisis communication specialists. This immediate assistance is sometimes crucial for quickly containing the damage.

And finally ... Cyber ​​insurance can be a important component of the company's security strategy It's crucial to carefully compare different offers, plan for individual risks, and carefully review the contract terms and conditions. In addition to the coverage amount and insured benefits, the deductible and IT security requirements also play a key role. This is the only way to find a tailor-made contract that offers reliable protection in an emergency.

According to a Bitkom study from August 2024, 81 percent of all German companies were victims of data theft, espionage or sabotage within one year.

Checklist: Cyber ​​Risk Analysis
 

1. Operational risks
- Which IT systems are in use (e.g. hardware, software, network systems, accounting, email, cloud services)?
- What sensitive data is processed or stored?
- What operational impact would a cyberattack have?

2. Potential threats
- Is there a risk of phishing or social engineering?
- How high is the risk of a ransomware attack?
- Can data fall into the wrong hands through insecure networks or lost devices?
- Where are there potential vulnerabilities (e.g. networked machines, digital control systems, hacker attacks, viruses, data loss)?
- Which business areas and customer data are particularly worth protecting?

3. Existing IT security measures
- Are firewalls, virus scanners, regular software updates and backups available and up to date?
- Do the IT systems comply with recognized security standards (e.g. BSI, ISO/IEC 27001)?

4. Required IT security measures
- What minimum technical requirements does the insurer expect (e.g. firewalls, antivirus protection, backups)?
- Do employees need to be regularly trained in IT security?
- Do certain evidence or documentation need to be provided regularly?

5. Expert advice
- Was the cyber insurance selected with the assistance of an expert advisor?
- Were offers from different providers systematically compared?
- Are the contract terms tailored to your own craft business?

Checklist: The right cyber insurance 


1. Scope of insurance
- Does the policy cover damage to the company's own assets and third-party damage, including damage caused by external IT service providers?
- Does the insurer cover costs for IT forensics, data recovery, and system restoration?
- Does the protection also apply to mobile devices and cloud services?
- Is compensation paid for business interruption caused by cyber incidents?
- Are crisis communication, legal advice and PR measures included?
- Are there any exclusions or special conditions (e.g. in cases of gross negligence or outdated systems)?

2. Procedure in the event of damage
- How quickly must an incident be reported?
- Is there a 24/7 emergency hotline?
- Is there a network of IT forensics experts, lawyers, and PR experts available to provide immediate assistance?

3. Costs and services
- How high are the insurance premiums in relation to the operational risk?
- What deductible applies in the event of damage?
- Are there additional benefits or discounts for proven IT security?
- Is the maximum reimbursement amount sufficient for a worst-case scenario?

4. Review and adjustment
- Are your own IT security measures reviewed and updated at least once a year?
- Can cyber insurance be regularly adapted to new risks and threats?

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