What is Cyber Insurance and Why You Need It

Since the late ‘80s when malware and scams began hitting in-boxes (remember the Nigerian prince looking for money?), cybercrime has spread as fast as a gallon of milk spilled on your wooden kitchen floor – and just like spilled milk, cybercrime is pervasive, difficult to clean up, and if you don’t find it all, you’ll be dealing with a sour environment for quite some time.

2017 was a rough year for most of us, with the Equifax breach, the Yahoo hack and global ransomware events leading the headlines.

In the United States, more than 1500 data breaches exposed more than 178,000,000 records – representing more than one-half the U.S. population and a +45% increase in incidents compared to 2016. Through the end of February, the U.S. has had more than 150 breaches affecting 3,400,000 records.

Cyber insurance, also known as cyber risk insurance or cyber liability insurance coverage (CLIC) has evolved to manage the risk of cyber-crime.

Cyber Insurance

Cyber insurance helps organizations and individuals with the costs of recovering after a cyber breach or cyber theft.

  • Cyber liability insurance covers legal costs associated with cyber-crime and the costs associated with notifying and monitoring victims, investigating the crime, and public relations efforts.
  • Individuals can obtain cyber insurance to help with extortion, restoring data, crisis management and even cyber-bullying.

The value of CLIC lies in availability of experts – consultants and attorneys – who can quickly respond to cyber-attacks.

PwC estimated about one-third of U.S. companies had cyber insurance in 2015 – this number jumped to about 50% in 2017.

Why You Need Cyber Insurance

  • Cyber-crime costs you money. According to Accenture, global costs of cyber-crimes reached $11.7 million per company in 2017, a +23% gain compared to 2016. In the U.S., the average cost per company reached $21.2 million. These costs extend beyond the immediate expense – you may have lower revenues if customers are reluctant to continue doing business with you.
  • Cyber-attacks damage your reputation. Customers and investors want to work with companies they can trust. A data breach can erode your brand identity and lower your perceived value.

Cyber insurance is becoming part of organizational risk management. Showing how you protect customers and staff, identify threats and respond to exposure have become requirements for companies interested in obtaining cyber insurance coverage. With the EU General Data Protection Regulation (GDPR) becoming active in May, 2018 companies must demonstrate and adhere to guidelines about cyber security or face penalties.

Keezel can help you with a security strategy for your organization, working with you to develop a robust plan that qualifies for cyber insurance. Contact our team to find out more about our online security device.

Or you can invest in Keezel today.