The Need for Cyber Insurance Increases as Cyber Risks Grow

Laura BednarCybersecurityLeave a Comment

Cyber Insurance Industry Wide

Cyber insurance, or “cyber liability insurance,” covers your business from unexpected attacks such as data breaches and other cybercrimes. This insurance can be purchased by individuals and businesses. It essentially protects users from web-based risks and risks surrounding information technology and its associated activities.

Do you need cyber liability?

Evidence shows that data security is increasingly important for companies and consumers. In 2014, approximately 85 million records were attacked and exposed due to data breaches. In numbers, over 780 breaches were reported. That number marks an astonishing 500% increase in attacks from 2005. Since then, unfortunately, breaches have only increased. In 2017 over 1,570 breaches were reported, which is double the rate of attacks in 2014. So, if your company hasn’t invested in cyber liability insurance yet, now’s a good time to start.

Cost

In light of the increasing attacks, businesses have made a conscious effort to protect their electronic data. The rate of companies purchasing cyber liability insurance doubled from 19% in 2014 to nearly 40% in 2018. Each year, the number of businesses investing in cyber liability insurance grows. The cost varies depending on the insurance provider and the plan selected. Most insurance plans start for a low price of $1,000 and go up from there.

The overall price also varies based on company size. Larger companies usually pay more for insurance than smaller companies. Companies with larger IT departments and standalone IT firms pay more for cyber liability insurance, too. When you compare the cost of paying for data breaches versus purchasing an insurance policy, it is far more cost-effective to be safe than sorry.

Benefits

There are many advantages to getting cyber liability insurance. It can protect your company in many situations, including:

  • Notifying employees and customers about a breach
  • Restoring personal information and identities for affected consumers
  • Restoring compromised data
  • Repairing damaged computer systems

Companies that invest in data security can take advantage of additional benefits including getting tips to manage and reduce risks to computer and technology systems.

Who needs cyber insurance?

Cyber liability is beneficial for any company hoping to keep its data and customers’ information safe from a cyberattack. However, certain industries are more susceptible to cyberattacks, which means they will benefit the most from investing in cyber liability insurance. These industries include:

  • Healthcare
  • Finance
  • Government
  • Retail
  • Accommodations

Although there is some discrepancy among experts as to the ranking of these industries, experts agree that these sectors are the most at-risk when it comes to cybercrime.

Of the industries affected, one of the most vulnerable to attack is healthcare. The troubling statistics show that one out of every eight Americans will have their personal medical information exposed at some point. Many hackers attack the healthcare system for financial gain. Stolen healthcare records can also be used to gain access to prescription medication and medical programs.

Over half of all breaches come from inside sources, according to a data breach investigation report conducted by Verizon in 2018. However, most attacks are a result of human error rather than a deliberate attempt to confiscate and disseminate personal medical information.

Impact of cyber insurance in the future

As the world of technology becomes larger and more sophisticated, the frightening reality, experts say, is that it’s a matter of “when,” not “if” a company is affected by a cyberattack. That warning is certainly backed by data showing the increase in data breaches over the past several years. Small businesses and multi-national companies alike are targeted. Regardless of company size, businesses that are perceived to have insufficient systems or outdated systems are especially susceptible to predation by cybercriminals. Once cyber criminals find a weak point in a system, they are likely to strike repeatedly.

When it comes to cyber security and data protection, it’s always best to take preventative measures. If your company has been victimized by a cyber security issue, or if you just want to stop an attack before it starts, we are here to help. SecureData has custom high-level data protection capabilities, offered in the form of a team of digital forensics experts and hardware encrypted storage devices. We serve a variety of industries and operate around the world. Contact us today at 1-800-388-1266 to learn more and find a cyber security solution.