Cyber insurance products are predicted to experience the most rapid growth in premiums over the next three years, following the trend of the previous five years. Since 2013, cyber premiums have seen the most significant growth at 23% annually, and that is set to continue until 2021 at the earliest. By which time, the worldwide premiums are expected to be worth US$4 billion, correlating to an annual growth rate of 14.1%. These figures point to an ever-increasing spend on cyber insurance, something that will not come as a surprise considering the increasing threat posed to organisations across the globe.
Why purchase cyber insurance?
There are a number of reasons why a business should purchase cyber insurance. The most common motive tends to be the fear of business interruption. Senior management are fully aware of the damage that can be caused by suffering a cyber attack. Therefore, the majority are making it a priority to ensure they are covered in the event of a breach. By purchasing insurance, it provides the board with the comfort that due diligence has been carried out, and that any disruption caused can be compensated for.
Another reason for purchasing insurance is the increased regulatory scrutiny that is being placed upon businesses since the introduction of GDPR in May. It has meant that data protection has taken on even greater significance, with heavier sanctions now in place if regulations are not followed. As a result, suffering a data breach can now be catastrophic, and having insurance in place can go a long way in determining how damaging the event is to a business in the long-term.
Providing evidence to customers and suppliers that coverage is in place is also a contributing factor which leads to many businesses purchasing cyber insurance. By offering such assurances, it prevents such stakeholders from worrying about whether their data is safe. Furthermore, it provides comfort that they should be financially covered in the event of a breach taking place. Keeping customers and suppliers satisfied is vitally important, and providing clarification on security will go some way to ensuring this.
Some are yet to follow suit
A recent study has found that 70% of businesses have already purchased cyber insurance, and despite this being a large majority, it does mean that 30% still have not. For those who have yet to go down this route, they are taking an unnecessary risk, one that can be very costly. Budgets can determine whether it’s feasible, but considering the damage that can be caused, every effort should be made to make funds available.
If you suffer an attack, you certainly won’t regret it.