The market for cybersecurity coverage remains competitive, and more business owners have decided to invest in insurance policies to protect from hackers and malware. That’s the good news.
But the risk still outweighs the precautions taken, according to insurance industry watchers – and that’s the bad news. Not enough clients are adopting the coverage, especially when proof continues to pile up that no organization is safe from a cyber event.
A 2019 Cyber Readiness Report from specialty provider Hiscox found that 53% of U.S. businesses reported a cyber attack in the previous 12 months, from 38% the previous year. In all, 45% of those companies experienced three or more attacks in the past year. Yet 27% of firms have no plans to adopt cyber insurance, according to the report.
Considering the potentially devastating cost of recovering from a cyber attack, that statistic becomes especially alarming. According to McAfee’s 2018 Economic Impact of Cybercrime Report, the global cost of cybercrimes is estimated to be between $445 billion and $600 billion. But less than 20% of all businesses have purchased cyber insurance. That rate continues to increase, but not nearly to the degree to guard against harm to the level of exposure that remains.
Adopting a line of thinking that “It won’t happen to me” may be the biggest mistake of all, according to industry experts. Business owners who only think of cyber attacks in terms of data breaches miss the other risks that exist, including extortion and business interruption – all of which represent serious and costly issues that need to be addressed through coverage.
Copyright 2019 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.