Today, many firms rely on their normal property and liability coverage, rather than a standalone cyber insurance policy to defend themselves against cyber catastrophes. These attacks have been on a steady increase throughout the last decade, and yet, according to a recent survey by the Insurance Information Institute, more than half of businesses (59%) lack dedicated cyber attack coverage.
However, as new digital dangers develop almost daily, neglecting to obtain a standalone cyber insurance policy has become an increasingly high-risk practice, and has in fact, contributed to a large increase in both the cost and frequency of these cyberattacks. From simple data hacks, to full scale ransomware attacks, no company is really safe today. Adding to the problem is the fact that, in order to avoid unexpected (and costly) underwriting losses, several traditional insurance companies have begun adding additional policy restrictions and more restrictive coverage requirements relating to cyber catastrophes. Some insurance companies have even changed their policy language to explicitly exclude coverage for cyber-related losses.
An increasing number of businesses are finding coverage gaps in their commercial insurance programs since they don’t have standalone cyber policies. In the event of a cyberattack, these businesses would either receive only a partial reimbursement from their regular property and liability insurance, or no aid at all. Such a lack of coverage, especially in the face of rising cyberattack severity, might result in long-term financial troubles, delayed recovery capabilities, and serious reputational harm to your business.
With this in mind, it’s critical for your company to understand the scope of coverage provided by your conventional property and liability insurance for cyber-related damages. If this coverage is insufficient for the level of cyber threats that your company faces, a separate cyber insurance may be required to ensure adequate protection.
Insurance coverage aside, there are many steps you can take as a business to decrease the potential threat of a cyber attack.
- Implement multi-factor authentication on all workplace technology
- Leverage endpoint detection and response tools to identify and deter suspicious network activity
- Encrypt all sensitive data to make it less accessible to cybercriminals
- Develop a trusted and skilled workplace cybersecurity team
Ask your First Volunteer Insurance agent for a complimentary copy of the White House Ransomware Prevention Guide for Business to help you become better prepared, but in any case, keep in mind that each company’s cyber danger level is unique. To identify your organization’s particular cyber exposure and coverage needs, make an appointment to talk with one of our knowledgeable insurance specialists. Contact First Volunteer Insurance today at 423-668-4888 for more information and a frank discussion about your insurance options.