Business leaders are hardwired to reduce risk and limit exposure. One precaution receiving increased executive scrutiny is cyber insurance (CI). The concept is still relatively new and the industry is rapidly evolving, so questions about costs, coverage and even necessity remain fairly common. Consider these trends:
1) The number of CI policies written is increasing every year; the value of premiums paid in 2019 is around $2.5B.
2) Total cyber claims grew 39% from 2017 to 2018, however average payouts have been decreasing since 2012.
3) In 2020, factors affecting your premium will include the underwriter’s assessment of your firm’s: security training protocols, loss history, types of data collected/stored,
and system vulnerabilities.
4) Despite other advances, the industry has not yet standardized coverage, so terminology may be inconsistent and confusing.
5) You can get data breach protection, which covers your costs when data you hold is attacked; and/or cyber liability coverage, which offsets costs when you’re accused of causing or allowing a cyber incident.
Consulting with an IT managed services provider (MSP) on a well-thought-out business continuity plan is a good first step.