Cyber Security Insurance
Business enterprises face the real issue of cyber security today. Whether malware, phishing, or other attempted breaches of security, it’s difficult to know the full extent of the damage cyber attacks cause. Data breaches don’t help consumer and client confidence. Businesses can keep the full scope of cyber attacks close to the vest. Though they may do this to mitigate public opinion and consumer confidence, it may not help their insurable interests at large.
This lack of transparency is only one challenge facing insurers today in regard to this growing problem. Insurers also find it difficult to accurately produce actuarial data given the challenges of rapidly changing technology, software unreliability, security lapses, and sophisticated viruses instigated by unpredictable, criminal outside entities. This causes insurers to demand high deductibles while capping coverage, not the best marketing formula for an insurance carrier.
Businesses want cyber security insurance coverage anyway. Premiums approach nearly 3 billion annually and are expected to reach nearly 8 billion before the end of the decade. More and more companies insure against damage or interruption to their networked systems, data and business operations.
But, are they getting a fair deal? It may not appear that way with high deductible combined with limits and caps on coverage. However, this lack of coverage to premium balance across the board does not prevent companies from insuring against the unknown. Businesses seem to understand insurers find the unknown very difficult to measure and predict. Business owners should consider cyber attack risk separate from other risks and not group it with other perils, e.g., fire, windstorm, flood or even theft.
It Will Get Better
Though the menace of technology exists when used in deviant forms, it has a nemesis in the ability of impassioned and invested people to use that same technology in a standard manner. With the goal of safeguarding business systems, data, and operations, businesses should bond together to share data on cyber attacks. In addition, by utilizing those with expertise to mitigate the risk via technology and protective policies, insurance carriers will face less of a challenge when comprising actuarial models to assess risk. Ability to measure and predict based on available data will prove vital going forward. Lower premiums and better coverage options should follow as insurable risk becomes easier to determine.
If you have any questions about cyber security insurance for your business, Insurance For Texans knows how to navigate this complex issue. Give us a shout. We'll help you out.