There was a time when the term “cyberattack” was a cute little buzzword; now, the prospect of a cyberattack is a reality for all. Any company with any computer equipment must be prepared. And as the awareness of cyber crime grows, so grows the market for cyber liability insurance, which is becoming more and more essential for some firms.
Make no mistake: cyber liability insurance is growing in prevalence. Last year, Wells Fargo Insurance surveyed 100 companies from the middle-market on up; 44 percent had filed an insurance claim related to a cyberattack, and all but 15 percent of the companies surveyed had cyber liability coverage, according to Business Insurance magazine, which summarized the survey.
And with this information comes a warning: cyber liability isn’t just a threat to retailers, who have reams and reams of personal data. Any firms with any customer or personal data could be attractive to hackers, who know low-hanging fruit when they see it. A batch of Social Security numbers, addresses and any other key personal data is valuable for identity theft. And attacks can come at a big price; per the Ponemon Institute (via Reuters), a cyber breach costs $3.8 million from which to recover.
In the end, the damage to a company’s credibility can be great. Customers who have lost data lose peace of mind, in addition to resources. Trust is shaken at best and broken at worst. Companies will be expected to make it up to those afflicted, as well as employ damage control to ensure the afflicted customers don’t leave their product for another. That’s why cyber insurance is necessary, and it’s why the market for cyber is so strong.
If you would like to find out more about cyber liability coverage or other strategic insurance solutions, contact The Plexus Groupe today by calling 847.307.6100, or by visiting us at plexusgroupe.com.
References “5 Recent Reports on Business and Cyber Security, Liability and Insurance. Insurance Journal, November 6, 2015.
“Cost of data breaches increasing to average of $3.8 million, study says.” Reuters, May 27, 2015.