Businesses are beginning to see the value of cyber liability insurance
Retailers may need to begin taking cyber liability insurance more seriously. The world is becoming more digital and businesses are beginning to follow consumers into the digital space in order to better accommodate their needs. This means that a growing number of businesses are beginning to expose themselves to digital threats, and these businesses may not be equipped to handle these threats in their various forms. Businesses have yet to fully comprehend the risks that are inherent in digital world and as such are falling prey to malicious groups that would exploit sensitive information.
High profile attacks highlight the need for cyber protection
Cyber insurance is becoming more necessary, but the availability of this coverage is beginning to decline. Last year, Target, one of the largest retail groups in the U.S., was the victim of a major cyber attack that resulted in the loss of consumer financial information. The data breach caused serious damage to Target, both in terms of finances and reputation, and highlighted the need for cyber liability protection. In the wake of the attack, however, some insurers opted to discontinue their cyber liability products because of the expensive nature of these products. Those that continued offering protection began doing so at a higher price.
Cost of coverage is growing at a rapid pace
The cost of cyber insurance depends on many factors. For large, non-retail businesses, the cost of an insurance policy can be as high as $50,000. The cost of coverage for retail organizations tends to be more modest, but this type of coverage is quickly becoming more expensive than it had in the past. Marsh LLC, an insurance brokerage firm, notes that the cost of cyber insurance has increased by 26% from what it had been in 2012.
Insurers may not yet be accustomed to managing digital risks
High profile cyber attacks have a major impact on the cost of cyber insurance. These attacks are very public and often receive significant attention. Many insurance groups are not well accustomed to managing the threats that exist in the digital space, which means that their products may not be able to account for all the risks that exist therein.