Interest in cybersecurity insurance has rapidly increased in the last few years, thanks in part to events like the recent WannaCry ransomware attack. For many companies, this global incident served as a wake-up call. In the week after the attack, cyber insurance orders rose by 40 percent.
Interestingly, the biggest issue in selling cyber insurance is educating businesses about the need for such coverage. The majority of them (40 %) still think that it is not needed, 29 % “believe they are already covered under existing policies”, and only 12 % list a reason for not having coverage is because “premiums are too high”. However, with data breaches rising by more than 300 percent in the last five years, cyber insurance coverage has become a necessity.
The global cyber insurance market is estimated to grow up to $20 billion by 2025 from today’s $4 billion. The ubiquitous risk on the internet has created demand for covering all liabilities connected with being online. Traditionally, cybersecurity insurance was focused on cases of cyber breaches, but the demand to cover ransomware is rapidly growing. It also covers possible business interruptions or repetitional harm.
In case of a breach – and depending on the insurance package – the insurance company would pay for all costs and damages related to the breach, such as legal costs, impact on reputation, investigator, hiring PR agencies, notifying customers, and cyber incident response. After all, with cyberattacks increasing on a daily basis and all devices being connected to the internet, cybersecurity insurance is a necessity for all companies to protect their networks and computers.
Cyber Insurance Policies and Jobs
Most cyber insurance policies cover data breaches and offer ways to address the breach if necessary. Larger companies might have better tools in place to prevent these incidents, either through their own so called “breach mitigation experts” or contractors. On the other hand, smaller companies might now have the resources to prevent the breach and the means to address it. They are more vulnerable to attacks and might not even notice it happening.
However, cyber risk is developing faster than the insurance policies. That means that choosing the appropriate coverage is difficult, according to the 2016 Aon report on cyber, which focused on views and attitudes by individual industry. Because cybersecurity insurance is quite new, these developments also mean that it will bring more jobs. And not only for those who understand networks or software. For instance, more cybersecurity lawyers will be needed, as the “legal pressure grows heavier”. And on top of that, cyber attacks are also helping to increase the share prices of cybersecurity companies.