Society is becoming more integrated with technology and that is exposing businesses to new threats that they may not be prepared to deal with. Cyber insurance is designed to be a type of protection against these threats, but many businesses have yet to fully embrace this protection. Large companies tend to have cyber liability policies in force, but smaller companies do not typically see this type of coverage as necessary, mostly due to the misconception that they are not high value targets.
High profile cyber attacks are often highlighted in the news, drawing attention to the surprisingly vulnerable nature of big businesses. These attacks often lead to a scramble for cyber insurance coverage, but not from small companies. Small businesses do not often take cyber protection into consideration because they believe that they are not large enough to be considered attractive to malicious groups. These groups do regularly target small organizations, however, and they do so precisely because these organizations do not take security seriously.
For large businesses, cyber insurance is becoming mandatory due to the growing prevalence of technology. People are beginning to use their mobile devices more in their daily lives, which means mobile interaction with businesses is at an all time high. For smaller companies, the necessity of cyber protection is somewhat less mandatory. While companies still need to protect themselves, they may be able to do so effectively by taking security more seriously. No amount of security can guarantee that a company will not fall victim to a data breach, but adequate security measures can reduce a small organization’s need for cyber insurance coverage.
The necessity of cyber insurance largely depends on how much money companies are willing to spend on such protection. An estimated 35% of companies currently invest in cyber liability insurance and many of these companies are not regularly targeted by malicious digital attacks. Such attacks are like natural disasters in their unpredictability. This means that cyber protection, like other forms of insurance coverage, is a form of protection that may never actually be used on a regular basis.