Proxy insurance

Proxy insurance is a strategy to reduce the negative effects of a cyberattack. One of the most significant issues that businesses are currently facing is cybersecurity. Considering the growing frequency and sophistication of cyberattacks, organizations must safeguard their systems, data, and reputation against possible harm. 

But cybersecurity also involves recovery in addition to prevention. Businesses may be subject to significant expenses and liabilities in the event of a breach, which could impact their operations and profitability.

One type of risk management that can assist in shielding companies from potential losses resulting from specific operations is proxy insurance. It functions by assigning financial responsibility for the expenses related to possible harm brought about by an insured party’s actions to a third party, referred to as a proxy insurer.

This article will explain proxy insurance, how it functions, and the reasons businesses use this type of risk management. Along with examining some of the main advantages of working with a third-party insurer, we will also explore the activities frequently covered by proxy insurance.

Overview of prevalent cybersecurity threats

Cybersecurity threats are ever-changing and getting more sophisticated. In 2021, the average data breach cost was $4.24 million, the highest amount in 17 years, according to a report by IBM and the Ponemon Institute. Malicious attacks accounted for 52% of data breaches, followed by system errors (25%), and human errors (23%). Some of the most prevalent cybersecurity threats that businesses face today include:

  • Ransomware: malware that encrypts data and requests payment for the decryption key. Attacks using ransomware can ruin a company’s reputation, compromise confidential data, and interfere with daily operations.
  • Phishing: a form of social engineering assault in which users are tricked into divulging personal or financial information or downloading malicious software using phony emails or websites. Phishing attempts may result in malware infection, account takeover, or identity theft.
  • Distributed denial-of-service (DDoS) attacks involve overloading a network or website with traffic from various sources, thereby preventing legitimate users from accessing it and causing the attack to be distributed. DDoS attacks may result in lost revenue, downtime, or unhappy customers.
  • Data leakage: An event where sensitive or confidential information is unintentionally or unintentionally made public. Insider threats, improperly configured cloud services, and stolen devices are all potential causes of data leaks. Legal liability, fines from the authorities, or a competitive disadvantage can result from data leaks.

Defining Proxy Insurance

An insurance policy known as proxy insurance shields companies against financial losses that might arise from a cyberattack on their proxy server. The first line of defense against cyberattacks in cyber security is the proxy server, which can be compromised to cause significant data breaches and monetary losses.

Businesses can benefit from proxy insurance by feeling secure because of being protected in an unfavorable incident. Proxy insurance enables companies to get monetary reimbursement for legal fees, data recovery, and PR expenditures related to a data breach in their proxy server.

Proxy insurance is a crucial component that businesses must consider when developing their cyber security plan.

When is proxy insurance needed?

Businesses must have proxy insurance when they use proxies for their online operations. Intermediaries, or proxies, serve as a doorway between users and servers or webpages. They can offer several advantages, including:

  • Enhancing privacy: Proxies can hide the user’s IP address and location from the websites they visit, preventing them from tracking their online behavior or collecting their data.
  • Bypassing geo-restrictions: Proxies can allow users to access websites or content blocked or unavailable in their region, such as streaming services or social media platforms.
  • Improving performance: Proxies can cache frequently accessed web pages or files, reducing bandwidth consumption and improving loading speed.

However, proxies also come with risks. Hackers who compromise a proxy server can intercept, modify, or steal the user’s data or traffic. They can also redirect users to malicious websites or inject malware into their devices.

Therefore, businesses that use proxies for their online activities need proxy insurance to protect themselves from the potential consequences of a proxy breach.

Benefits of proxy insurance

Proxy insurance offers several benefits for businesses that use proxies for their online activities:

  • Reducing financial losses: Businesses that suffer from legal fees, data recovery costs, business interruption losses, or reputational damage can all be compensated for by purchasing proxy insurance.
  • Enhancing customer trust: Businesses can increase customer confidence and loyalty by showcasing their dedication to data security and privacy through proxy insurance.
  • Complying with regulations to avoid possible fines or penalties, proxy insurance can assist businesses in adhering to pertinent data protection laws and regulations, such as the California Consumer Privacy Act (CCPA) or the General Data Protection Regulation (GDPR).

Is proxy insurance worth it?

Businesses that use proxies for online operations and wish to protect their data, systems, and reputation from cyberattacks should consider purchasing proxy insurance. Companies looking to manage their cyber risks and maintain business continuity can find a comprehensive and affordable solution in proxy insurance.

Proxy insurance does not, however, take the place of appropriate cyber hygiene and best practices. To avoid or reduce the possibility of a proxy breach, businesses should also put in place suitable security procedures and guidelines, such as:

  • Choosing a reputable and reliable proxy provider that offers high-quality service and security features.
  • Encrypting their data and traffic with secure protocols, such as HTTPS or SSL.
  • Updating their software and systems regularly to fix any vulnerabilities or bugs.
  • Educating their employees and users about the potential risks and threats of using proxies and how to avoid them.


Businesses that use proxies for their online operations can benefit from proxy insurance in several ways, including decreased financial losses, increased customer trust, and regulatory compliance. 

Continue reading our blog to learn more about using residential proxies most effectively and how to lessen the chance of a proxy breach.