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Security: Is Cyber Insurance a Reasonable Defense?
Statista reports 1244 data breaches in the US during 2018. Chances are that your business or your personal information has been hijacked by one of these breaches.
Is cyber insurance a solution for your business? Cyber insurance could pay for forensics investigation that determines the extent of damage, business losses, the cost of notifying customers whose data has been breached, and costs related to lawsuits and extortion.
The cyber insurance market is growing rapidly. 2016 and 2017 saw annual growth near 30 percent. Growth in 2018 was at 12 percent. The premiums written for standalone and packaged cyber insurance plans is a $2 billion market, according to AM Best.
Claims are also up substantially. The claim rate grew at 39 percent in 2018.
But cyber policies sometimes capped by a ‘war exclusion’ clause. For example, when Mondelez, a US food company, lost 1700 servers and 24,000 laptops because of a ransomeware attack, the insurer, Zurich American Insurance Company, refused to pay because the cyberattack was an “act of war”.
Michael Mittel, president and general manager of cybersecurity specialist RapidFire Tools, said that “the recent explosive growth of confusing cyber insurance products coming to market means thousands of SMBs are purchasing policies filled with technical contingencies that could — and frequently do — void their claims.”
