With cybercriminals increasing their attacks on businesses of all sizes, businesses are turning to cyber insurance for another layer of protection.
Growing at a Compound Annual Growth Rate (CAGR) of nearly 28 percent from 2016 to 2022, the worldwide cyber insurance market is expected to generate $14 billion by 2022, according to a report released by global market research firm Allied Market Research.
Even though the majority of organizations aren’t covered by cyber insurance, some are considering purchasing policies soon. According to a Spiceworks poll, 11 percent of organizations that don’t have any coverage plan to purchase cyber insurance within the next two years.
Before purchasing cybersecurity insurance, you should know why you need a policy, what the plan covers, and why cybersecurity insurance isn’t enough.
There are a few reasons why cyber insurance has been growing in popularity among businesses of all sizes across all industries. The number of recorded data breaches in the U.S. rose to 1,473 in 2019 from 1,257 a year earlier, an increase of 17 percent, according to Identity Theft Resource Center. Nearly 165 million sensitive records were exposed in 2019. For the second straight year, the business sector was hit the hardest with 644 data breaches. Businesses without cyber insurance policies in place are risking a lot. A single attack could damage a business beyond repair.
While cyber insurance policies vary, their design is to protect businesses from the effects and consequences of data breaches and other types of cybersecurity attacks. Many policies cover the following: notifying customers about data breaches; repairing damaged software or hardware; crisis management expenses; regulatory fines; and legal fees. Before purchasing any cyber insurance policy, do your homework. Review your cyber policy options and evaluate insurers.
Even though cybersecurity insurance is helpful, it’s not enough to fully protect your business from the ever-changing IT threat landscape. You must ensure the proper protections are in place for your business. Is your software up to date? What about your hardware? Is your data backed up? Are you using antivirus software? Can you spot phishing email scams? There’s a lot to consider when developing a cybersecurity strategy for your business. Building a cybersecurity program from the ground up isn’t an easy task. Put the right safeguards in place before you purchase cyber insurance.
If you’re still considering cyber insurance, don’t wait too long to make a decision. Be sure to consult with an insurance specialist to discuss the proper coverage for your needs. Your time may run out. With cybersecurity attacks expected to rise, you may fall victim to a breach sooner than later.