Think You Don’t Need Cyber Liability Insurance? Think Again.

Unsure about cyber liability insurance? Learn why your organization needs to take out a policy immediately to protect its financial resources and stability.

According to a forecast published by Gartner, worldwide spending on cybersecurity products and services is expected to grow to $124 billion by the end of 2019. Gartner’s research director, Siddharth Deshpande, stated: “persisting skills shortages and regulatory changes…are driving continued growth in the security services market.” The main drivers behind the growth in cybersecurity spending include:

Increased and ongoing security risks

Needs of organizations and businesses

Changes in the information technology (IT) industry

Prevalence of Cybersecurity Attacks

The Canadian Internet Registration Authority (CIRA) reported that 40 percent of its 2018 survey respondents had experienced a cyber-attack in the past year. The percentage increased to 60 for large businesses, with 1 in 10 respondents indicating their organizations had experienced 20 or more different cybersecurity attacks. Up to 78 percent expressed confidence in their cybersecurity measures, but 37 percent did not have anti-malware programs installed and 71 percent lacked a formalized security patch policy. A lack of cybersecurity measures and policies can leave organizations vulnerable to attacks and liability to others when their personal information is compromised.

Industries that are more likely to become targets include:

Retail

Consumer Services

Financial Services

Healthcare

Insurance

Prevention Methods

Organizations in these high-risk industries in Ottawa, Kingston and Eastern Ontario can conduct a cybersecurity assessment to mitigate the potential of a data breach or theft of proprietary information. Implementing secure wireless networking protocols and infrastructures can also help an organization’s IT leaders monitor and deter ongoing security threats. However, despite these precautions, the probability of a data breach occurring is still high. With the average cost of each data breach the equivalent of $3.9 million U.S. dollars, cybersecurity insurance has become a necessity.

Cybersecurity Insurance

Cybersecurity insurance protects organizations against the liabilities and costs related to data breaches. While all organizations that exchange or store information through networked equipment should consider taking out a policy, certain factors create an urgent need for coverage. Organizations that collect and store customer or company data that is of high value to scam artists and hackers are especially vulnerable. The type of data that increases the risk of a cybersecurity attack includes financial records, employee records, proprietary intellectual property, trade secrets, and confidential or sensitive customer data. Other high-risk factors include employing vendors that have or will need access to the firm’s network, a low security or IT budget and insufficient financial resources to cover the costs of a data breach.