As a growing number of hackers make recent news headlines, businesses are no longer comfortable without coverage.
At the same time that it has become clear that even the most sophisticated data systems among the leading high profile companies can still be broken into by skilled hackers, the cost of those attacks is becoming increasingly clear to businesses of all sizes and they are beginning to purchase cyber insurance at an increasing rate in order to cover themselves against potentially devastating damage.
This special form of risk and liability insurance policy was once nearly unheard of and is becoming mainstream.
That said, while many companies are, indeed, buying cyber insurance in order to mitigate their risk against these data breaches and attacks, it is clear that not all are doing so, but they may not be avoiding the purchase by choice. According to Bill Goddard, an insurance consultant from Brown Smith Wallace, there are a great many businesses that simply cannot afford the added cost of the premiums on their monthly expenses. For this reason, despite the fact that they would like the coverage, many remain uninsured.
At the same time, the importance of cyber insurance continues to prove itself in high profile news stories.
Goddard explained that “Hackers have been successful lately. We’ve all heard the names: Target, Schnucks TJ Maxx.” Those are only some of the more recent examples. He explained that these breaches are not only common, but they are very costly. Not only is the recovery of files and security expensive, but even more damaging can be the loss of confidence among consumers, causing companies to lose a painful amount of money.
To illustrate the point, Goddard said that “If you have a million credit cards you could have losses in the $10-20-30-40 million range and what happens to your business when that happens?”
When cyber insurance is in place, some of the cost of that data breach is paid for by the policy. This type of coverage is relatively new and it is quite specific, but it can provide the assistance that a company needs while it is interrupted and must recover from having its customer data accessed or stolen.