Is Cyber Insurance a Necessity Today?
Cyber-security is more necessary than ever in today's menacing online world. Check out why cyber insurance is so crucial now more than ever as part of a successful risk mitigation strategy.
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Today many of global organizations are considering cyber insurance as the priority to include in their risk mitigation strategies due to rising data breaches in the last few years.
Though many businesses today already have some kind of general liability and property insurance, cyber risks are excluded in these insurance policies due to this the global enterprises are identifying the insurance companies that offer coverage for cyber risks.
Insurance Information Institute has reported that number of data breaches has reached its all-time high in the current year exposing more than 85 million records vulnerable to risk and it emphasizes the significance of having proper risk mitigation plan for global enterprises to recover and manage from cyber attacks.
Cyber insurance is gaining rapid momentum and recorded double digit growth in the recent year, it has evolved as a lucrative opportunity for many global insurance businesses.
Majority of the larger businesses today have some kind of cyber insurance, whereas the smaller businesses consider cyber insurance is only for larger businesses and the probability for cyber-attacks is relatively less in their business.
Nevertheless breaches are not always occur due cyber-attacks, but loss or theft of personal laptop or USB drive which consists of unencrypted data can also be considered as data breach or cyber-attack.
Though there are widely varied coverage and insurance plans are available in the market today, majority of the insurance companies offers four main types of cyber insurance coverage plans.
Privacy management and data breach coverage helps the insurers by paying them to recover and capably manage data breach. This coverage includes credit monitoring for victims, legal fees and forensic investigation. Multimedia liability insurance covers the cyber-attacks that cause damage to media, website and intellectual property rights.
Extortion liability coverage, which covers the damages that occurred as result of extortion such as damages incurred to encrypted hard-disk or DDoS attack that damage website. Network security liability covers theft incidents and DDoS attacks
No two businesses are similar, the same cyber risks are, it is necessary that enterprises evaluate cyber insurance policies that best suits to their kind of business and the probable cyber risks that their business could face in future.
In the initial years of cyber insurance trend, majorly enterprises from technology, healthcare and financial sector opted for cyber insurance which still continues. In the last few years retail and manufacturing companies are buying cyber insurance necessarily to keep themselves capable to recover and manage the data breaches.
More small and mid-sized companies are buying cyber insurance in the recent years as they realized the value and support that they get from cyber insurance companies when data breach occurs.
Opinions expressed by DZone contributors are their own.