Every day there are emerging stories about the latest data breach or cyberattack on a government or business website. Cybercrime continues to grow but the number of companies who have cyber insurance is not growing at an equal pace. Although it is difficult to determine how many companies have a cyber policy, PwC estimates that only 30% of companies have cyber risk insurance or cyber liability insurance coverage.A recent article by TechNewsWorld highlights the importance of understanding what a cyber policy is and how every company in every industry is at risk. Alarmingly, most businesses do not believe that they are at risk; yet, cyber incidents can impact any or all of an organization’s assets. Some examples of assets that could be impacted include customer and/or client data, employee information, financial assets, IP addresses, credit card information and even the company’s reputation and business continuity. Whether they recognize it or not, every company has some type of “cyber” exposure that needs to be protected.
As cyber breaches continue to develop — and there seems to be no end in sight— proper cyber coverage is becoming more and more essential. There are no widely accepted solutions to prevent cybercriminals from invading and taking company information. Another important aspect about the current cyber market is that it is very inconsistent. When it comes to cyber coverages there are different forms, structures, intent, solutions and more to consider. Companies need to understand their unique cybersecurity exposures to then properly transfer the risk. Companies need to take the time to investigate the cyber needs of their particular industry to get a full understanding about what is at stake.
The nuance continues when it comes to dealing with actual cyber claims. Due to numerous factors, including circumstance, outcome, coverage in place and the fact that every event varies slightly, handling a cyber claim can be quite challenging. Ultimately, if the policy placement wasn’t done properly (under a true cyber policy, aligning exposure with the proper wording and coverage, etc.) an insured can experience the harsh reality of a carrier declination, which several organizations have faced in notable cyber breaches.
What is clear is that there is a general lack of understanding and knowledge about the exposure as well as the cyber insurance policies and coverage. An insurance broker like RCM&D can provide cyber expertise and significant assistance in choosing the best cyber protection plan. Reach out to an advisor so you can better understand, assess and act on any cyber exposures you may face.