Most Businesses Vulnerable to Emerging Risks Not Covered by Their Cyber Insurance

[InfoSec News <alerts () infosecnews org>]

https://www.cpomagazine.com/cyber-security/most-businesses-vulnerable-to-emerging-risks-not-covered-by-their-cyber-insurance/

By Alicia Hope
CPO Magazine
May 11, 2020

According to a new study by the Hanover Insurance Group, Inc., most businesses 
are more vulnerable to emerging risks such as malware and ransomware attacks 
than traditional threats such as the breach of personally identifiable 
information. However, the report found most businesses were insured against 
traditional cyber threats instead of the emerging risks. The study, which was 
carried out in collaboration with Zogby Analytics, found that the cyber 
insurance coverage gap poses an existential threat to the majority of the 
businesses.


The current situation in cyber insurance

Most businesses contacted said the decision to purchase a particular policy was 
based on recommendations from independent insurance agents. The study also 
found most businesses understand the extent of cyber threats they face and 
understand the negative impacts of such incidents. However, 42% of businesses 
did not have adequate cyber insurance to cover the cost of a cybercrime-related 
incident, despite 9 in 10 businesses reporting a cyberattack. Additionally, 60% 
of businesses reported it would take just two days to become unprofitable in 
case of a cyber attack that denies them access to critical systems or data, 
while 92% said an attack would cause a negative financial impact. Despite 84% 
of businesses feeling inadequately covered by their current policies, 38% have 
not increased their cyber insurance policy limits within the past 12 months. 
The study found small businesses being more vulnerable to cyberattacks than 
large or middle-sized businesses. The majority of small businesses also lacked 
cyber insurance coverage.

Another observation showed media coverage informed the decision to purchase a 
cyber insurance cover for 50% of business leaders. Past attacks influenced 37% 
of the business decision makers to purchase a cyber insurance cover. According 
to Bryan J. Salvatore, president of specialty insurance at The Hanover, having 
the appropriate cyber insurance protection will only become more important as 
new technologies emerge, businesses become more connected, and cyber criminals 
develop more sophisticated methods. He added that as businesses grow in 
complexity, the advice of an independent agent becomes increasingly important 
in helping business owners understand the many risks they may face and mitigate 
those emerging risks.

[...]



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