Companies have been taking out hundreds of millions of dollars worth of cyber-insurance in order to help protect themselves after having witnessed the impact of a large number of high profile data attacks by hackers.
Regardless of the fact that many policies still leave organizations vulnerable to claims, they are trying to gain the added protection of the insurance on top of their efforts to boost their other security efforts such as improved training for employee and human resource functions, and information technology practices.
That said, some of the forms of coverage that are meant to protect against this type of intrusion still come with deductibles as high as tens of millions of dollars – in some cases – should a data breach occur.
According to brokers and insurers, the demand for this type of coverage has spiked, as organizations try to fend off the possibility of government and regulator fines, or civil suits. Moreover, they are hoping to cover more monotonous expenses such as letters of apology to their customers.
Co-national managing director Kevin Kalinich, from the insurance broker Aon Corp.’s professional risk group, confirmed that “When you have a catastrophic type of data breach then yes … the phones ring off the hook.”
This response has been largely the result of recent sensational attacks that have been occurring one after the other. They have hit giants such as Google, Sony, Lockheed Martin, and even the International Monetary Fund, and the U.S. Senate.
The successful attacks on these large, established organizations have made other businesses begin to wonder about the risk to their own data and networks.