For the first time in history, Cyber Security is now a primary focus for most insurance carriers. Cyber Insurance has become the fastest growing coverage line in the insurance industry. One of the primary reasons for this is that companies are losing millions of dollars annually to cyberattacks.
Many carriers have changed their application process quite a bit over the last couple of years – some have created entirely different applications for cyber insurance. What was once a 3-5 page application in 2020 is now a 13-15 page application in 2021.
In 2022, it is estimated that over half of all cyberattacks will be directly aimed at small businesses. However, the average data breach cost for small to medium-sized companies is about $20,000. That's an amount that most small business owners can't afford to pay on their own, especially since it doesn't account for any lost revenue from stolen data or from customers refusing to do business with a company that has been hacked.
Premiums have gone sky high
Is your company prepared to handle a cyber attack?
With the rise of web-based services, digital tools, and the growth of non-traditional work arrangements, companies are at greater risk than ever before for cyber security. This means that insurance companies change their premiums to reflect this new reality.
Insurers are raising premiums and tightening conditions on cyber-security policies.
Invariably, cyberattacks have grown exponentially in recent years, and insurers are struggling to keep up with the damage.
In 2022, it's a good idea to have cyber security insurance
While you may think about cyber security as a modern problem, the fact is that the internet has been around for decades—and hackers have been attacking businesses of all sizes and types for almost that long. In fact, one of the earliest recorded attacks was back in 1988 when Robert Morris hacked into over 6,000 computers on the internet.
And attacks like these aren't slowing down—they're speeding up. The number of breaches is growing exponentially, as are the financial losses associated with them. This means that in 2022, it's a good idea to have cyber security insurance for your business.
If you don't believe us, look at what happened to Target in 2013: They were hit by a massive hack that stole 40 million credit card numbers. And they had cyber liability insurance! After paying $202 million in settlements (an estimated $61 million in legal fees), they filed a claim under their policy, which paid out $90 million.
It's 2022, and you're a business owner. You've just realized that your server is down. And so is all of your data
What do you do?
The answer depends on how prepared you are to handle a cyber security crisis. If you have cyber security insurance, there are people who can help you. But if you don't? If you're like most business owners, your options aren't so great.
Cyber crime happens every day, and it's getting bigger and more sophisticated all the time. In 2019, the cost of cyber crime incidents rose to $3 trillion dollars—that's a 62% increase from 2018! More than half of small businesses report that they've suffered a cyber security incident in their lifetime, but only 39% of them carry cyber security insurance.
That doesn't mean every breach will cost this much money—many factors determine how much damage a breach can do. But even if you've followed all your security best practices, you don't want to risk your reputation and legal fees or worse, the impact could be so huge it results in business closure.
Please stay tuned for Part 2 of our next upcoming blog, as we will focus on the breaches currently taken place and being sure to have all the proper cyber tools in place to qualify for cyber security insurance.
If you have any questions or in need of any further details on how to be sure you are in the proper path of securing your business, and taking the proper precautions, please feel free to reach out to us here at KRS IT. You can speak to a live tech assistant via phone at, 201-932- 2696 or 201-879-6397. We can also be reached at [email protected]