Data Security Update – Cyber Insurance
Insurance commercials proliferate the TV landscape these days. You can’t go five channels without tripping over a gecko, a general, or a JK Simmons. Sometimes an ad will mention other insurance companies making premiums skyrocket after one accident, and claim that they don’t treat their customers that way.
Well, cyber insurance brokers sure have no qualms about it. In light of all the high profile data breaches these past couple of years, including Target, Home Depot, and Anthem (and despite a flat rate in 2014), the first half of 2015 alone has seen the average cyber insurance rates for retailers rise 32 percent, in addition to soaring deductibles. In some cases—those deemed the riskiest prospects—insurers won’t even write policies breaking $100 million, thus forcing entities whose breaches exceed that total to pay out of pocket for everything from credit monitoring to the cost of potential legal fees.
That rates go up after incidents, especially headline-grabbing ones, is no surprise. Then again, I’ve spoken about cyber liability insurance before, and as expected, the most significant drawback, when considering whether or not it should be mandatory, is indeed the price for higher-risk companies.
By: Jonathan Weicher