The exceptionally high profile data breach has served as a kind of wake-up call for business execs.
Following the massive data breach at Ashley Madison and several other high profile data breaches, businesses in Canada are starting to realize that there is greater potential value to cyber insurance than they may have previously realized.
These companies are now purchasing these insurance policies to protect themselves against cyber attacks.
Back in July, Ashley Madison found itself making news headlines around the world when hackers were able to smash their way into the company’s network and share the personal information of its customers, including their financial data, identifying information and even the messages they had shared with other members. The fallout for the company has been disastrous, leading to a class-action lawsuit and causing the CEO at the time, Noel Biderman, to step down before the end of August.
This type of situation is a nightmare for businesses that are now investing in cyber insurance to protect themselves.
These types of stories are what are showing companies that there is a broad spectrum of different real-world consequences that can occur as a result of vulnerabilities in the digital sphere. Deloitte director of technology, Duncan Stewart, explained that the last year has seen a notable upward trend in the awareness of data breaches. The result is that businesses are looking to their insurance companies to better prepare themselves for what is looking increasingly like an inevitability in today’s connected ecosystem.
He explained that “The number of attacks are rising, the severity is rising, and when they come, they’re more difficult to deal with.” In Canada, the law does not require companies to publicly report data breaches, which makes the actual number of digital attacks – and the true need for cyber insurance – difficult to estimate. However, the Websense security business stated in August 2014 that about 36 percent of businesses in the country had experienced an IT security breach over the previous 12 months. A KPMG survey among property insurance execs in the country indicated that data security was the third largest risk faced by companies this year, making it even greater than unexpected catastrophic events.
