A business coverage that is exploding

The cyber security buzzword simply isn’t going away – and brokers have an opportunity to seize a business that is growing at a fantastic rate.

Risk Management News

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The cyber security buzzword simply isn’t going away – and the numbers are staggering.

A PricewaterhouseCoopers survey released this week revealed that the number of cyber security incidents has already increased to 42.8 million — a whopping 48 per cent higher than it was last year. Broken down, that averages out to about 177,339 incoming attacks every day.

Unsurprisingly, businesses with gross annual revenues of at least $1 billion detected the greatest increase in cyber security incidents — 44 per cent more than last year. However, while companies with revenues of less than $100 million detected 5 per cent fewer incidents, the report was careful to stress this is no cause for celebration.

“One explanation may be that small companies are investing less in information security, which may leave them both incapable of detecting incidents, and a more tempting target to cyber adversaries,” the report reads.

The survey asked 9,700 business officials to disclose their detected security incidents, and while PwC stresses that the incidents are “by no means definitive,” they stand to underline an even harsher point — these numbers only represent the incidents detected and reported. Many attacks or breaches often go undiscovered.

Whatever the situation, the numbers continue to highlight the great importance of cyber insurance, whether added as an endorsement to a business owners’ policy (BOP) or commercial general liability (CGL), or as a standalone products.

In addition to providing a hot new market for producers, offering cyber insurance also plays an important role in minimizing agents’ own professional liability.

“Insurance agents who are selling BOPs or CGLs have some risk to their own E&O if they’re not presenting cyber insurance as a security or privacy product,” said Jeremy Barnett of NAS Insurance. “If their clients suffer from a breach and are not covered under their CGL, the agent may have some potential negligence they’re liable for.”
 

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