More companies are purchasing liability insurance to protect against cyberattacks
A growing number of companies throughout the U.S. are purchasing liability insurance to cover the potential threats they face from cyberattacks. Insurer Marsh Inc. notes that data breaches and other cyberattacks have caused a spike in its business over the past year, with sales of liability insurance coverage for these attacks rising by a third. Marsh claims that companies that already had liability insurance coverage for cyberattacks are purchasing even more protection in order to guard themselves against hackers and malicious parties.
Cyberattacks are becoming more prolific
Cyberattacks have been making headlines throughout the U.S. in recent months, especially as the federal government begins to pin many of these attacks on China. Over the past two years, cyberattacks have become more prolific, highlighting the extreme losses that companies can see if they do not adequately protect themselves. High-profile companies like Sony and PayPal were hacked in 2011, putting the financial information of millions of consumers at risk of exploitation. Recently, a growing number of U.S. government websites have been the targets of cyberattacks, suggesting that no company or organization is safe from such attacks.
Companies purchasing more than $17 million in liability insurance coverage
According to Marsh, the companies purchased an average of $17 million in liability insurance against cyberattacks in 2012, a 20% increase over how much coverage was purchased in the previous year. Insurers have been trying to sell cyberattack liability insurance as additional coverage for conventional commercial insurance policies for several years, but have only recently begun seeing traction with their efforts. Many insurance companies have been very vocal about the potential threats that exist in the online world.
Security continues to be a problem for many US companies
These risks are beginning to be taken more seriously by U.S. companies, many of whom had long considered the online world to be little more than a gimmick. The unfortunate fact is that companies could still see major losses from being the target of a cyberattack even if they have adequate liability insurance coverage. Moreover, the security measures meant to defend against such attacks become outdated almost as quickly as they are introduced, due to the rapidly evolving nature of cyberattacks.