Cyber insurance, also known as cyber liability insurance or data breach insurance, is a special type of insurance program that businesses can use that is designed to protect them from internet-based or technological threats. Traditional liability insurance policies will not cover losses of customer or employee information that resulted from a cyber-attack, which has caused many companies to opt-in to cyber insurance policies because of the ever-increasing risk of cyber security breaches that comes with the widening spread of technology.
Unfortunately, just one hacker, stolen laptop, or piece of malware could compromise the security and safety of your entire business, or the private information of your clients and customers, potentially destroying your reputation or financial well-being. So, insurance coverage for your sensitive information, as well as the sensitive information entrusted to you, could be very important. Cyber insurance can cover anything from social security numbers to individual physical or mental health information, to customer or employee payment information, to identifiable information like names, addresses, phone numbers, and more.
Cyber Insurance Policy Costs Are On The Rise
This insurance will help you cover the costs of things like fixing or replacing broken software, recovering or replacing lost or stolen information, or sometimes may even compensate you for a loss of income if your business was left unable to operate by a cyber-attack. They may also pay for security upgrades, investigation of breaches, notify you and your customers of data breaches, or handle some public relations work if your reputation was compromised. If you are a business owner, particularly one that handles sensitive information, you should look into getting a cyber insurance policy for your company.
However, the costs of cyber insurance have seemingly been skyrocketing within the last couple of years due to a massive increase in attacks and rapidly growing demand for the product. According to some news reports, the cost of cyber insurance went up globally around 30% in 2021, and around 92% in the US. And the exponentially increasing amount of malware attacks and data breaches may be to blame. Since 2019, they say that cyber attacks have increased by a whopping 170% and are still rising. Plus, the average ransom price given by cyber criminals trying to hold your information hostage has risen from around $43,600 in 2019 to over $220,000 now. Insurance providers have now started bumping up their rates to avoid more losses for themselves.
Providers Are Becoming Picky
Companies have started to see insurance providers using stricter guidelines and criteria when choosing who to cover and who to not. Nowadays, if you cannot show any personal efforts you have taken to keep your company’s online information safe, like the use of email encryption services, anti-virus software, or ransomware protection, many insurance companies will pass on providing you coverage. Some providers are demanding that their current and potential clients utilize multi-factor authentication, two-factor authentication, or one-time passwords to protect their email, financial accounts, and desktop or server log ins. There are some that are also mandating security awareness training – such as phishing simulations – for companies and employees as a prerequisite to earning coverage. These companies are being forced to quickly adapt to the constantly evolving attacks of cyber criminals and cyber-attack groups; though, it can be understandably inconvenient for the policy holder.
With cyber attacks always on the rise, companies and business owners are now realizing the importance of insuring their information. No matter how many security measures you have set in place, just one mistake could lead to a company-wide disaster and enormous expenses. Now, insurance companies are seeing the rise in cyber threats and the rise in demand for their services, and prices are increasing more than ever in response.
As always, having a trustworthy IT support team like Blue Oak behind your business will also add an extra layer of protection from any cyber threats. With our managed IT services, we can help guide you in the right direction in order to keep your business safe and secure.
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