Periodically, The Reschini Group will focus on a particular topic related to Risk Management or Property and Casualty issues. This month, we focus on Cybersecurity. Read on, and be sure to check out the resources available through the links.
Worth the Investment: Defining Cybersecurity Insurance
Insurance coverage is meant to protect one’s assets in the event of theft, damage, or disruption. When your online information gets hacked, all three factors come into play. So why not carry insurance to protect yourself from this potential disaster?
Cybersecurity insurance does just that. The U.S. Department of Homeland Security defines it as follows:
“Cybersecurity insurance is designed to mitigate losses from a variety of cyber incidents, including data breaches, business interruption, and network damage. A robust cybersecurity insurance market could help reduce the number of successful cyber attacks by: (1) promoting the adoption of preventative measures in return for more coverage; and (2) encouraging the implementation of best practices by basing premiums on an insured’s level of self-protection. Many companies forego available policies, however, citing as rationales the perceived high cost of those policies, confusion about what they cover, and uncertainty that their organizations will suffer a cyber attack. In recent years, the Department of Homeland Security National Protection and Programs Directorate (NPPD) has engaged key stakeholders to address this emerging cyber risk area.”
The 2017 Cost of Data Breach Study, conducted by the Identity Theft Resource Center, has stated that:
- The overall cost per data breach worldwide decreased from $4 million to $3.62 million over the past year, but those same costs increased in the U.S. by 5 percent, to $7.35 million per data breach.
- Having an incident response team reduced the cost of a data breach by nearly $1 million.
- Health care is the most costly industry for data breaches, costing organizations $380 per compromised record.
Having a cybersecurity protocol, backed by the proper level of insurance coverage, is not only smart business – it could keep your business from disappearing altogether. The National Cybersecurity Alliance reported that nearly 60 percent of small businesses victimized by cyber attack closed permanently within six months. Putting the right protection in place is not difficult, and can be achieved more cost-effectively than might be assumed.
Fitch Ratings said that cybersecurity insurance policies in the U.S. have risen by 35 percent, reflecting a growing awareness and appreciation of the risks and how to reduce them. The cybersecurity insurance specialists at The Reschini Group can work with you to help safeguard your organization in the same way.
More About Cybersecurity
Read The Reschini Blog: Protecting Yourself from Online Data Breaches
Read The Reschini Blog: Guiding Parameters for Preparedness in Cybersecurity
Get: Cyber Risk Exposure scorecard
Get: Cybersecurity for Small Business
Get: Cybersecurity for Healthcare Organizations
Copyright 2017 The Reschini Group
The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.