Increase in Cyber Crime Results in Cybersecurity Insurance Increase
If you don’t know by now (and you should), cyber crime is real.
This past May, five Chinese officials were indicted by a grand jury here in the states for stealing data from major U.S. companies like Alcoa and U.S Steel among others. In June, a Chinese businessman was arrested for hacking into the databases of Lockheed Martin and Boeing. Last December, big-box retailer Target was the victim of one of the largest cybersecurity breaches ever in the U.S. with tens of millions of customers’ debit and credit card information leaking into the hands of nefarious hackers.
The Target breach cost CEO Gregg Steinhafel his job, and Target saw a 14% decline in share price in only two months; 50 lawsuits have also been filed against the retail chain. This is in addition to the cyber breaches reported against eBay, JP Morgan and Chase and even St. Joseph Health System in the past year. Needless to say, the demand for cybersecurity insurance has risen.
In 2013, average coverage limits by firms with more than $1 billion in revenue rose by 10% (Investor’s Business Daily) but there is still plenty of growth left in the market for insurers to provide cybersecurity insurance. Willis Group Holdings released a study confirming that only 6% of Fortune 500 companies retain a cyber breach policy while a Ponemon Institute study found that only a third of U.S. entities hold cybersecurity insurance.
No matter the size of your business, the time is now to secure cybersecurity insurance. Insurers are selling this kind of cyber protection at alarming rates because the threat of hackers is viable and substantial. Coverage can include legal defense costs, data recovery costs, public relations management, electronic forensics and more.
If you’re still debating on whether or not the cost of a cybersecurity policy is worth it, then let this statistic sink in: in 2001 Symantec estimated that cyber crime costs businesses $114 billion annually—today, McAfee estimates that figure to be $445 billion.
The Internet revolution has allowed cyber criminals easier access to hardware and software specifically created to steal information from your business. Become proactive, don’t become another statistic.
