Cyber Risk Insurance Need

Cyber Risk insurance is widely available and inexpensive, but not enough companies are buying the protection.  As noted in a recent survey by Towers Watson (see here), the majority of companies do not buy the coverage.  The survey of 164 risk and finance managers found that 73% have not purchased network liability policies. 

This survey was focused on larger companies, and we believe the uninsured number is much higher if small companies are included.  One estimate of the percentage of companies without Cyber Risk coverage is 80-90%, but our experience indicates that the number is likely in excess of 90%.

The obvious exposure is loss of data from hackers.  However, the majority of breaches are the result employee errors – lost laptops & thumb drives.  And sometimes these breaches can be extremely expensive due to the large volume of data residing on the lost media.

Technology coverages encompass a range of exposures.  Some are specifically tailored, and others are broader.  More information is available on the Technology page of our web site (see here).  Often these coverages are combined in one policy – which we call Cyber Risk – but sometimes the forms are not quite as comprehensive.

The names used to describe the coverage can be confusing as well, which is why we use the term cyber risk.  Some of the names used to describe these coverages include cyber liability, data breach, privacy, hacker coverage, network liability and technology E&O. 

Specialty Insurance Expertise: Tennant Risk Services
Supporting Insurance Entrepreneurship: Tennant Capital Partners

Comments

[Cheap Term Life Insurance]

Great point. The growing risk for cyber fraud, you would assume, would make for a growing demand for similar insurance, however, I think companies assume they have it all covered on their own, which makes them feel secure, until it happens. I mean playstation for example had their entire network hacked into and all the data stolen, which makes for huge possibilities and liabilities when it comes to cyber fraud.

[long term disability insurance Austin]

This is easy to understand from the beginning. There is no automatic coverage in a common general liability or property policy for the majority of cyber risks. The only thing to keep in mind is the complication surrounding the management of Cyber Risk, and the eventual transfer of risk to insurance, is the relative lack of legal precedent.

[Renters Insurance In Georgia]

This is definitely something a lot of small companies have no idea about, but could have exposure to. For just about any business it is definitely worth getting a quote on.

[Ian Monteros]

I always believe that having a Cyber Risk Insurance is important for companies nowadays. I just hope insurance agencies will discuss clearly to clients the benefits of it to make it more appealing to them not just explaining some effects in case data are lost or stolen. Thanks.

[debt management advice]

I don't think alot of companies even know it exists to be honest. But as we become more dependent on the internet I can this becoming really big business. As the world moves into cloud computing you are gonna need to make sure you company and its information is insured. Shared servers and hosting are already wide spread but companies are not yet fully realising what the consequences are should everything go south. I have already seen it on a couple of ocassions.

[Insuranceblog]

I agree that cyber risk insurance is useful and widely available and inexpensive, i believe that there will be enough companies to buy the protection.

[Ben Clark]

Any time sensitive client information is stored a company should have cyber risk insurance. It's a growing trend that data is being lost or stolen. Sony's PlayStation network was hacked causing the network to go down for around a month. The iPhone's unofficial release has also always seem to come from one getting left at a bar by an employee. Both are examples of why this protection is critical.

[Axis Insurance]

Cyber Risk is extremely important. With the recent trend in hacking (i.e. Sony, Citi, and the list goes on) this has never been more important.

Mike Smith
President
Axis Insurance

[Health Insurance NZ]

The facts are little bit shocking, and i am sure in future most of the companies are going to avail cyber risk insurance.
Thanks for the unique article.

[Sean McNamara]

As a broker I do attempt to find the right coverage for my clients. It is interesting to see that a lot of businesses I deal with are not even remotely worried about this form of coverage. They feel it is part of doing business. Unfortunatley it will take more claims history to show the benefit to clients.

[Dirk]

I think that is true what you write about cyber insurance. Some companies need it and can get it for low prices.

[Oscar German]

I really wasn't aware that this type of insurance existed, but I can see the need. This is good to know.

Kind_Regards

[small business insurance]

Companies don't realize they need this type of coverage until after they've been breached, and by that point it's too late.

[excel development]

I'm writing an article on cyber predators, and I'm doing research on the subject. I've found a lot of horror stories about web creeps, but I've also found some sites that say that the epidemic is vastly over exaggerated.

[Crashcare Insurance Claims]

Its a good insurance but it wont bring things back which have been hacked into and deleted not unless backups are made regularly

[debt management company]

I can definitely believe those figures I guess it is just not something that many companies think about until it is to late. I think this kind of coverage is even more important for finance and medical related companies. Also a friend of mine has a number of sites and his hosting had their servers wiped and he lost everything luckily he had cover but I know many people don't so for anyone that has a sizeable site cover is a must.

[Best insurance decisions]

I'm thinking that Cyber Risk insurance is must and isn't expencive for insurance companies.

[Jaclyn]

Interesting... I've heard that attacks from hackers in China are on the rise, so I'm surprised more companies aren't responding

[J. Daniel A.K.A. "The Contractors Insurance Geek"]

Thanks for sharing this glaring hole small businesses are opeing themselves up to. At the rate this problem is growing, it's crazy for any business with exposure to not have insurance to cover this liability.

[Insurance Quotes]

One of our agents had their identity stolen a while back. There was not much in the way of cyber insurance back then. Scary stuff for sure. Hackers suck!