Cyber liability insurance has been the hot industry topic of 2017. A number of high-profile cyberattacks such as Wannacry, NotPetya and Equifax
have thrust the value of this comparatively new insurance product into the limelight.
It has become a key defense in helping companies mitigate cyber risk and withstand damages caused by data breaches. But some concerning data collected by the online insurance agency Insureon
suggests that not all businesses are tuned into cyber risk.
A new Insureon poll of 2,500 Manta members found that 74% of small businesses don’t have cyber liability insurance, despite the fact that nearly one in six small businesses have experienced a data breach and almost a quarter (25%) have customer data that’s susceptible to an attack on their business network.
Small businesses remain dangerously in the dark
when it comes to cyber security. A shocking 82% who answered the Insureon poll said they didn’t feel at risk of experiencing a cyberattack or breach, despite data suggesting almost two thirds of cyberattacks are aimed at small and mid-sized businesses.
“The survey results are surprising considering the amount of media circulating about mass data breaches and cyber security
,” said Jeff Somers, president of Insureon. “Many small business owners have their whole life savings tied up in their businesses and they don’t understand how vulnerable they are to a cyberattack.
“Small business owners might think they’re safe because of their size, but the reality is they’re really just a microcosm of larger organizations and they’re all going to confront the same challenges. All businesses are vulnerable, particularly ones that accept credit cards, store customer information, or conduct business online or in the cloud.”
There’s a “great opportunity” for insurance professionals
to guide commercial clients to the light when it comes to cyber liability insurance, according to Somers. This starts with forming a solid customer relationship, understanding a client’s cyber exposure and passing on information to help the client make an informed decision about how to mitigate that risk.
A great way to get started is to provide simple, educational content for the client to digest in their own time. For example, Insureon provides a free, downloadable e-book to help small business owners learn about the potential risks associated with cyberattacks, and how cyber liability insurance can help.
“We want to be in the consultative selling business. We want to come to a decision along with the customer about what’s right for them,” Somers told Insurance Business. “And so, helping clients get more informed and more knowledgeable by having content readily available is a valuable way to get started.
“Brokers also have an opportunity to steer customers towards appropriate cyber security software solutions and to recommend best practices with regards to information protection, network security and employee training. Understanding the risks associated with managing customer data is absolutely paramount.”
The Insureon survey shows that understanding of cyber risk among smaller businesses in the US is still premature. It needs improving as the battle between businesses and hackers continues
, said Somers.
“We never want someone to lose their business because they didn’t understand the coverages that were available to them. That’s where the real opportunity for the insurance industry lies,” he added. “We need to help customers understand there’s no reason to put their hard work and life savings at risk when there’s a great backstop available in the form of cyber liability insurance.”
The power of partnerships in cyber insurance
Would industry-specific cyber be an easier sell?