Charles Sweeney, CEO of Bloxx, examines the case for commercial cyber liability insurance and what steps companies can take to reduce risk and premiums, the complete set of tips are available on ProSecurity Zone.
“With cyber threats repeatedly cited as the most serious threat to businesses and national economies, it has never been more critical to enact effective safeguards that prevent others’ nightmares from becoming your reality.
Companies have recognised this but are encountering difficult decisions along the way that hinder progress. With one of the greatest questions recently being, “What should be done about cyber-liability insurance?”
It sounds appealing to have a guarantee against the spiralling costs of a cyber attack: lost business, lost assets (including intellectual property), fines and remediation, to name but a few.
It would also appear that a growing number of companies concur – with Lloyd’s of London announcing a 50 per cent rise in demand for such policies since last year. Likewise, cyber insurers in the US saw spending double to $2 billion.
Whilst demand may be high, the UK Cyber Security report published in March reveals a different perspective, stating that only 2 per cent of UK businesses have taken out cyber insurance policies. Whilst other numbers, such as those released by The Corporate Executive Programme (CEP), indicate 20 per cent of companies have secured adequate coverage. Regardless of where the true number lies or what factors have been considered, one thing is certain: Threats remain high and cyber insurance adoption is low.
Such findings are equally perplexing and disconcerting and attest to many companies being sceptical of cyber insurance’s worth. According to KPMG’s recent survey on the topic, the number one reason companies are not buying is they doubt insurers will pay out on crisis claims. Even of those who have purchased cyber insurance, 48 per cent express fear their costs will not be covered.
This distrust is fuelled by the much-publicised cyberattacks on American retailers like Target and Home Depot. Target’s cyber policy was insufficient in covering all the company’s costs, leaving the store with a $162 million loss. Meanwhile, estimates point to Home Depot having near $105 million of cyber insurance, but only $15 million of their $43 million claim was paid.
Ambiguity remains the enemy as companies assess the best steps to take in protecting their interests. But several signposts can point the way forward and ensure a business is positioned optimally in cyberspace.”
The full article is available on ProSecurity Zone alongside some guidance on moving forward with a robust cyber security strategy and finding the appropriate protection, pertinent to your organisations requirements. Need more information? Have you considered cyber insurance? Let us know on twitter @Bloxx or find us on Linkedin, Facebook and G+.