Literature Review: An Analysis of Cyber Insurance and Its Impact on Business Disruption (Interruption)

Introduction

In the fast-changing world of computers and technology, a particular type of insurance called cyber insurance is becoming very important for businesses (Kshetri, 2020). As companies depend more on digital help, they become weaker due to online attacks, such as data leaks or people asking for money (Egan et al., 2019). These events don’t just mess up business work but can also cause big money problems. Cyber insurance plans are made to lessen these dangers, giving a protection net for businesses; they protect against different forms of harm and loss, making businesses stronger against the growing number of cyber threats (Palsson, Gudmundsson, and Shetty, 2020).

In the world of business management, learning about cyber insurance is very important. Modern companies work in a digital world that keeps getting more linked. Cyber dangers are becoming more significant threats to their working stability and financial safety (Kejwang, 2022). Knowing and taking care of these risks is crucial for good business management. Cyber insurance is a vital part of intelligent risk plans. It protects businesses’ money and helps them stay firm against online dangers (Kshetri, 2020). This makes it very important for business leaders and managers.

The primary research question of this review is: “What is the role of cyber insurance in helping businesses stop problems caused by threats on the internet?” We want to look closely at how good or bad these types of insurance are for protecting shops against trouble from online dangers. Goals include looking at how broad cyber insurance rules cover, checking their effect on business plans to see if things keep running smoothly and studying the link between cyber insurance and overall company strength against digital problems.

This literature review is structured into several key sections: First, it explains how literature is chosen and studied.

This is followed by a detailed talk about the results, where we look into the main topics and ideas from books or research papers. The review summarises the main points and thoughts on what these results might mean for future research and practice.

“Cyber insurance” is an exceptional help made just for businesses. It aims to reduce money loss from breaches, computer damage, and stoppages in the industry because of cyber attacks. “Disruption” means problems in everyday business because of cyber issues (Perwej et al., 2021). These can damage how people see the company and its financial situation. These meanings are significant for understanding what cyber insurance does in modern business risk management plans.

Methodology

In this study about cyber insurance and business interruption, carefully examining the important keywords was a crucial part of our research plan. Essential words like “insurance for cyber,” “trouble with business,” dealing with risk online, and keeping a company going were picked very carefully because they connect directly to the study. These words were carefully combined using special tools to improve search results, making them more exact and valuable. This method is very different from old keyword tactics, which usually use more general and not specific words. The change in how we find keywords, especially in online databases, helps us look up things more directly and quickly. This way, the research books are very close to what our questions want them to be about. This new way of picking and mixing words is significant for searching extensive digital collections. It ensures that your review of books or papers covers everything in focus.

The search strategy was meticulous and comprehensive. Fancy search options in databases like JSTOR, IEEE Xplore, and Google Scholar were used to ensure we got exact results that were important for our topic (Perwej et al., 2021). We also checked special business and security journals. These choices included sorting by when they were published if they were reviewed or approved by others, and specific words. Their strengths influenced the choice of databases. JSTOR has many academic journals, and IEEE Xplore has topics on tech and IT. Google Scholar covers many types of scholarly writing in its search results. This method differs from older ones using physical records and ordinary databases. These need to have the particular focus or advanced search tools that today’s digital databases do. The change in database technology has made research better and faster, which improves the quality of reviews (Sepúlveda Estay et al., 2020).

The rules for inclusion and exclusion of the book review were thought about. This made sure that only essential and good information was used. The rules for what was included focused heavily on using sources published in the last five years. This is because cybersecurity and business management are changing very fast nowadays. This focus on recent books ensures that the review shows what people know and do in this area. We prioritized articles and publications from top sources in cybersecurity and business that experts have checked. We made sure they were academically strong. Things like old stuff, not serious magazines or books about something else, weren’t picked for the study. This differs from older research methods, which usually covered more ground and included many publication dates. They also had less strict rules for picking sources to use. The review looks at new, rated by experts, and topic-focused literature. This ensures it matches what researchers accept as good quality work in schools today.

The process of getting information was very cautious. It focused on sorting data into themes like rules, examples, and expert ideas. This theme-based method lets us carefully examine how cyber insurance agreements are set up and their success in reducing company problems from online threats. The focus on real-life examples of cyber insurance showed how it works worldwide. It gave helpful tips about using this type of coverage. This way of getting data, only focusing on the essential types we need, is better than the old, simple methods (Sepúlveda Estay et al., 2020). They might have taken many kinds but not sorted them out like this one does. This unique way ensures the information suits what you want to know. It gives a full view of it. Modern ways that stress online records and new articles help get more exact details than old methods did. Older forms usually use bigger areas, including many physical files and simpler databases. New ways let us search very carefully, looking at recent work that experts have checked, and this makes sure the data is fresh and top-notch education-wise (Kshetri, 2020).

Discussion of Results, Analysis and Findings

The study about computer insurance and business disruption mostly came from school papers, company reports, and detailed analyses. These gave many different views that helped me understand the subject better. Books and studies gave new ideas, while work reports shared real-world thoughts and what’s popular now. Studies about real-life situations were beneficial in showing how cyber insurance policies work and affect the world.

The history of developed countries focuses on the United States and Europe because they have advanced cyber insurance markets (McShane, Eling, and Nguyen, 2021). Not enough was written about growing economies, suggesting we may be missing out on research. The writing talked about many different areas. It included finances, health care, and stores or factories making stuff. This showed that cyber insurance is essential to many businesses in various jobs. However, a big focus on the money business was seen. This may be because they started using cyber insurance early and are more likely to have computer problems than others (Perwej et al., 2021). This focuses on some areas and places that hint at future work needed for a fair view of the global cyber insurance scene.

Cyber insurance has changed over time, showing how people are adapting to the growing problem of computer risks. At first, cyber insurance was a small part of more extensive policies, but as the number and complexity of online threats increased, so did the ability to protect from them (Palsson, Gudmundsson, and Shetty, 2020). This change is marked by more significant focus areas, including particular kinds of online incidents like ransomware attacks and data leaks. Insurance companies changed by providing plans that include more than direct damage costs (Kejwang, 2022). These also cover business interruption losses and other indirect effects, and this change shows a more extensive view in the insurance business of how different cyber dangers are; it needs exceptional and complete coverage choices to keep companies safe online these days (Kejwang, 2022).

Cyber insurance is a complicated issue when it comes to stopping business interruptions. Some studies show that cyber insurance can help cut down on money losses and quickly recover after computer problems, while other research points out its weaknesses, too. These shortcomings include limitations on how much is covered and no coverage for certain cyber events (Martinez, 2019). This can noticeably affect the amount of safety given out. The difference in how healthy policies work is often blamed on their specific terms and conditions and the kind of computer problem that occurred (Martinez, 2019). This complexity shows why companies must know and pick their online safety insurance with care. They need to make sure it matches up precisely with the situations they face and what they require.

The literature shows that cyber insurance is increasingly seen as a complete tool for dealing with risks, not just finances you can use after something terrible happens. Insurance companies now offer many services to help businesses look ahead and lower risks before an attack occurs. These include checking for risk, training employees, and advising to improve cybersecurity (Sepúlveda Estay et al., 2020). After an accident, insurance companies also help guide handling the response and getting better steps. This service-focused method shows better teamwork between insurance providers and people with policies to create robust protection against cyberattacks. There is an apparent change from a system that mainly pays for problems to one that tries to stop and lessen issues while providing financial safety. Cyber insurance is now a regular part of risk management plans, not just an extra item (Kejwang, 2022). The work focuses on how this more prominent role comes from a more comprehensive view of computer risks as complex and needing different skills to handle them quickly.

The market for cyber insurance is quickly changing to match increasing needs as companies learn more about online risks. Insurance companies are changing what they provide and giving more personalized plans for specific businesses and individual dangers instead of the same program that fits everyone (Kejwang, 2022). This change to customized care through proper risk evaluation is a significant advance in cyber insurance. Insurance companies are becoming more strict with their application processes, ensuring that people who want coverage must have good cybersecurity plans first (Lemnitzer, 2021). This forward-thinking method focuses on stopping problems before they happen. It shows insurance companies considering cyber risk in a broader, more complex way.

Putting together the knowledge from this study shows that cyber insurance is essential for businesses to deal with problems caused by online dangers. However, how well it works can change based on policy words and trouble. This shows how important it is for businesses to carefully pick rules that match their risks. People who make rules and work in insurance should concentrate on creating better, more complete cyber insurance products. We should study how good cyber insurance is in different jobs. Also, we need to look at new ways policies are written down and find out what needs to be added to what people have already written about it with common words used by most English speakers (around 2000).

Conclusion

This review of books follows the changes in cyber insurance over time, from being an essential product to now a complicated way to manage risk. As hack attacks have grown more complex, insurers have also had to change their policies. The article discusses different results on how good cyber insurance stops business problems. Some studies show it gives good safety, but others find gaps in protection. Still, business insurance is becoming very important to protect against risks in their plans. This helps them avoid significant financial losses due to data breaches.

References

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Egan, R., Cartagena, S., Mohamed, R., Gosrani, V., Grewal, J., Acharyya, M., Dee, A., Bajaj, R., Jaeger, V.-J. ., Katz, D., Meghen, P., Silley, M., Nasser-Probert, S., Pikinska, J., Rubin, R., and Ang, K. (2019). Cyber-operational risk scenarios for insurance companies. British Actuarial Journal, 24. doi:https://doi.org/10.1017/s1357321718000284.

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Kejwang, B. (2022). Effect of cybersecurity risk management practices on insurance sector performance: A literature review. International Journal of Research in Business and Social Science (2147–4478), [online] 11(6), pp. 334–340. doi https://doi.org/10.20525/ijrbs.v11i6.1947.

Kshetri, N. (2020). The evolution of the cyber-insurance industry and market: an institutional analysis. Telecommunications Policy, [online] 44(8), p. 1007. doi:https://doi.org/10.1016/j.telpol.2020.102007.

Lemnitzer, J.M. (2021). Why cybersecurity insurance should be regulated and compulsory. Journal of Cyber Policy, [online] pp. 1–19. https://doi.org/10.1080/23738871.2021.1880609.

Martinez, L.P. (2019). Cyber Risks: Three Basic Structural Issues to Resolve. AIDA Europe research series on insurance law and regulation, [online] pp.211–230. doi:https://doi.org/10.1007/978-3-030-27386-6_10.

Palsson, K., Gudmundsson, S., and Shetty, S. (2020). Analysis of the impact of cyber events on cyber insurance. The Geneva Papers on Risk and Insurance: Issues and Practice. [online] doi:https://doi.org/10.1057/s41288-020-00171-w.

Perwej, Dr Yusuf; Qamar Abbas, S.; Pratap Dixit, J.; Akhtar, Dr N.; and Kumar Jaiswal, A. (2021). A Systematic Literature Review on Cyber Security. International Journal of Scientific Research and Management, [online] 9(12), pp. 669–710. doi https://doi.org/10.18535/ijsrm/v9i12.ec04.

Romanosky, S., Ablon, L., Kuehn, A., and Jones, T. (2019). Content analysis of cyber insurance policies: how do carriers price cyber risk? Journal of Cybersecurity, [online] 5(1). doi:https://doi.org/10.1093/cybsec/tyz002.

Sepúlveda Estay, D.A., Sahay, R., Barfod, M.B., and Jensen, C.D. (2020). A systematic review of cyber-resilience assessment frameworks. Computers & Security, [online] 97, p. 101996. doi:https://doi.org/10.1016/j.cose.2020.101996.

www.chicagofed.org. (2024). The Growth and Challenges of Cyber Insurance, Federal Reserve Bank of Chicago. [online] Available at: https://www.chicagofed.org/publications/chicago-fed-letter/2019/426 [Accessed January 3, 2024].