Even though cyberattacks are on the rise, not all businesses have purchased cyber insurance. While this may be the case, for now, things are expected to change shortly. Businesses are considering cyber insurance now more than ever.
The cyber insurance market is expanding. Growing at a Compound Annual Growth Rate (CAGR) of nearly 28 percent from 2016 to 2022, the global cyber insurance market is expected to generate $14 billion by 2022, according to a report released by global market research firm Allied Market Research.
If you aren’t quite sure whether you should purchase cyber insurance, you should first understand what cyber insurance is, what it’s not, and why cyber insurance is on the rise.
Cyber insurance is purchased to protect businesses from financial losses resulting from data breaches, network damage, business interruption, and other cyber incidents. While policies differ among insurance companies, they typically cover notifying customers about data breaches, repairing damaged software or hardware, crisis management expenses, and regulatory fines. Even though cyber insurance can be helpful in the event of a cyber incident, it isn’t a replacement for taking a proactive approach to cybersecurity.
Cyber insurance alone isn’t enough to protect your business from the ever-changing IT threat landscape. Before purchasing a cyber insurance policy, implement a proactive cybersecurity plan. Your plan should include your goals and initiatives, how you plan on educating employees on potential threats, the solutions you expect to use, and more. An IT services professional is frequently needed to assist a business with building a cybersecurity program to ensure its systems and networks are properly protected from the increasing number of cyberattacks from today’s hackers.
If you haven’t purchased a cyber insurance policy, you may want to consider looking into one. Cyberattacks across the board are on the rise in the U.S. The number of recorded data breaches in the country rose to 1,473 in 2019 from 1,257 a year earlier, an increase of 17 percent, according to Identity Theft Resource Center. The business sector was hit the hardest with 644 data breaches for the second straight year. You’re leaving yourself vulnerable to costs resulting from cyber incidents if you don’t have cyber insurance. The outcome of a single attack could cost you your entire business.
Don’t wait until a cyberattack hits your business to consider purchasing cyber insurance. Review your options today before it’s too late. Contact an insurance agent to discuss which plan and what coverage would be best for your business. With the right policy in place, cyber insurance could be a game-changer.