Cyber Risk Insurance Coverage
“Hackers are breaking the systems for profit. Before, it was about intellectual curiosity and pursuit of knowledge and thrill, and now hacking is big business.” – Kevin Mitnick
Effective use of internet technology has the potential to enhance the customer experience, improve organizational efficiency, and create great cost-saving opportunities. Along with all these benefits comes an ever increasing risk of being the victim of cyber crime.
Total annual cost relating to cyber crime is estimated to be between $375-575 billion. To put that number into perspective, the annual aggregate estimated global damage resulting from vehicle collisions is $518 billion.
In Canada, the cost, as of 2014, is estimated to be between $3-4 billion.
Beyond monetary damage, there are other unquantifiable costs. These costs include loss of reputation, erosion of consumer confidence, loss of sales, and cost of security enhancements.
Being a victim of cyber terror is more debilitating than a fire, liability, and theft. After a fire, a company can still set up a remote office. Some forms of cyber risk leave a company unable to access their files or entire network.
While many businesses still do not have cyber insurance today, within 5 to 10 years it will be uncommon for the serious business operation to not have proper insurance coverage in this area.
There are many aspects of Cyber Risk Insurance. At Bryson Insurance, our team of insurance professionals provide a complimentary risk assessment to assist in identifying cyber risk exposure. Connect with our team of professionals at 1-800-661-5196 or by clicking here to send us an e-mail.
To provide an introduction, Cyber Liability often involves multiple channels of risk. These include Privacy Risk, Cyber Risk, and Liability Risk.
- Privacy Risk involves the collection, use, or disclosure of personal or material data by those you do not choose to share it with;
- Cyber Risk pertains to any sort of risk of financial loss, disruption, or damage to the reputation of an organization from some sort of failure of information technology systems;
- Liability Risk is a more general insurance risk with a purpose of protecting from the risks of lawsuits and similar claims.
A complex array of cyber crimes have evolved over the past few decades. The three most common forms of cyber attacks are theft and other data attacks, Malware ( phishing and pharming ), and the wide variety of mechanisms that can infect computers.
What industries are most susceptible to experience a cyber incident?
IBM has collected historical data on what industries report cyber crime incidents. A breakdown of major industries include Manufacturing (26.5%), Banking/Insurance (20.9%), Communications (18.7%), Healthcare (7.3%), Retail (6.6%), Other (20%).
At this point, it is common to start thinking about how cyber risk impacts your business. It is best to have a conversation with one of our industry professionals. To connect with our team of professionals please call us at 1-800-661-5196 or click here to send us an e-mail.
We have created a simple chart that will provide you with some further perspective.
|Cyber Risk by Industry Segment||Realty||Contractors||Retail||Non-profit||Healthcare|
|Who do they maintain records on?||current & past tenants, potential credit checks||customers, employees, sub-contractors||customer, employees||donors, volunteers, employees||patients, doctors, nurses, other staff|
|What types of information to they keep on file?||Files containing financial information, background check information||Financial information on cheques, credit cards, potentially have home security information||Large amount of credit card data||Donor financial information, employee personal information||Protected health information, financial information, employee personal information|
|Who has access to information?||Condo association management, cleaning staff||Management along with anyone that accepts payments||All staff||likely all employees||All staff including administration and booking staff|
|Is there a data retention policy?||Not likely||Not likely||Possible, but still have large amounts of data||Not likely||Likely, but still large quantity of data|
|What is the source of exposure?||What is the source of exposure?||Websites, payment processing||Websites, payment processing, inventory systems, shipping systems||Websites, donation/payment processing||Websites, payment processing, medical devices|
Most cyber risks are not insured. Global cyber insurance premiums currently cover less than one-half of one percent of the estimated cost of cyber crime. Cyber crime has the potential to cause major disruption in your normal business activity. Our purpose as insurance professionals is to help you mitigate the impact of risks to keep your operation headed in a successful direction. Cyber risk is a growing concern. To gain an understanding how it may affect you and your business, please set a time to meet with us by calling 1-800-661-5196 or e-mailing our office.