Cyber insurance is a must for businesses, big or small, as cybercrime attacks grow in number and sophistication. Global reinsurance firm Gen Re highlights 10 facts that lead to more informed cyber insurance decisions.
- The number of data breaches continues to rise
There is an increase in security incidents and data breaches each year. It grew by 60 per cent (or more) over a two-year period, and nearly 150 per cent in four years.
- Small businesses are breached, too
According to Ge Re findings, 59 per cent of breaches involved small companies. In other studies, up to 70 per cent of all targeted companies are small businesses.
- Breaches can happen to any business
Breaches can happen in the form of wrong email attachment, stolen devices, and abandoned files. Said Gen Re, roughly one-quarter of all breaches arise from low-tech acts of negligence; and an asset is lost over 100 times more frequently than it is stolen. A small business may suffer a breach even if it is not targeted for crime.
- Breaches are getting more complex
Hacking/malware is the number one cause of breaches, accounting for 32 per cent of all breaches, and as much as 67 per cent in the retail and hospitality industries. Getting infected with malware can happen with a simple click of an email attachment.
- Complex breaches cost more
Complex breaches require expensive response costs. The forensic cost per record is US$170 for malware/hacking, as compared to US$134 for human error, said Gen Re.
- Law require immediate action
In the US, 47 states and D.C. and Puerto Rico have a law mandating prompt investigation, reporting, and customer notification of a breach.
- Big costs can come from small breaches
The median cost of breach for companies with less than US$50 million in revenue is US$32,500. The average cost is nearly double.
- Many incidents are not breaches, but still need action
A business owner does not need an actual breach to incur significant costs, said Gen Re. Legal and/or forensic help is needed to determine whether data was breached, or the lost information may not be the type protected.
- Cyber coverage is affordable and easy to buy
A basic cyber insurance protection costs US$100-US$150, and in most cases, does not require application. For a low premium, the insured receives breach response services and a defence to liability lawsuits.
- Keep customers by meeting their expectations with a cyber policy
Cyber insurance policies provide consumer notification of breach, identity theft protection, and credit monitoring – important services that consumers expect from the businesses they frequent, particularly after a breach
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