As technology has advanced, more and more business is being conducted online. This may make things easier for the consumer, but it has unintended consequences, as well.
Customers often store their personal data online to make purchasing products easier. Hackers know this and have begun to exploit this practice. If your company conducts business online, then you’ve probably looked into cyber insurance and may have been shocked at the price.
So why has cyber insurance gotten so expensive these last few years?
Demand
Why is cyber insurance so expensive? It boils down to increased demand. The COVID-19 pandemic found many people at home and short on money with businesses closed. This combination may have contributed to the increase in cyber attacks on various companies. As the number and cost of cyber-attacks increase, the number of businesses who want to purchase cyber insurance has expanded, as well. The higher the demand for cyber insurance, the more it’s going to cost to purchase it.
Price of Cyber Attacks
The cost of cyber-attacks has escalated over the past few years. The most expensive type of cyber attack is a ransomware attack. In a ransomware attack, hackers seize and encrypt a company’s data, making it unusable and bringing the company to a standstill.
On top of that, the hackers refuse to release the data until the company pays a ransom fee. These ransom demands are often in the range of several million dollars and the business is left with few options other than paying (and potentially not getting their data back anyway) or eating the massive business losses incurred by the corrupted data.
That is, unless the business was insured with cyber insurance, which will help them cover costs. Because of the potential cost of ransomware attacks to the insurance provider, companies are forced to increase the cost of cyber insurance.
What Cyber Insurance Will Cover
Cyber insurance might not be cheap but it is a worthwhile investment. This is because of what it covers. Most cyber insurance policies will cover data breaches, cyber attacks on your own network, cyber attacks on third parties that hold your data, international cyber attacks, and terrorist acts.
In addition to that, many first-party cyber insurance policies will cover expenses relating to legal counsel, data recovery, customer notifications, lost income, public relations, cyber extortion and fraud, forensic investigations, and any fines related to the cyber attack.
When it comes to protecting your company’s data, it’s better to be safe than sorry. Consider investing in cyber insurance.
Three Arbor Insurance
If you’re interested in cyber insurance for your company, contact us at Three Arbor Insurance. We offer general liability insurance in addition to cyber liability insurance. Call our Birmingham office at (205) 517-8890 to get a quote today!
