Cyberinsurance - Get a Broker

 "An uptick in data breach litigation and skyrocketing costs tied to ransomware attacks and other cybercrime are making it more difficult—and more expensive—for companies to secure insurance policies that help them cover financial hits." - Bloomberg Law, May 31, 2022.

Fitch Rating documents that premiums shot up 74% in 2021. In contrast, in P&C, the increase was 9%.

That's the tip of the iceberg in this insurance niche which only accounts for only 1% of the market. But which is so critical.

The other factors include:

• A changing insurance industry. That means much is in flux and there will continue to be myriad uncertainties. 

 

• Disputes about exclusions. 

 

• Two-way litigation. Companies may insist insurance covers the expense for fixing the hack - and payment of the legal expenses. Insurance companies go to court to shake off liability.

 

• Stepped-up security standards in order to be able to purchase a policy. They range from endpoint detection to multifactor authentication.

An additional issue is that only larger organizations may be aware such insurance exists. That leaves small and mid-sized businesses with full financial responsibility to deal with a hack. 

Because of all the complexities associated with cybersecurity, it probably is downright necessary to contract with an insurance broker to navigate this new terrain.

Connect with Editor-in-Chief Jane Genova at janegenova374@gmail.com.