As the digital age continues to expand and sophisticate, cyber risks are more prevalent than ever before. There’s a common misconception that only tech companies or businesses with a heavy digital footprint require coverage for cyber threats, but this has proven to be no longer valid. Most businesses face significant cyber threats and have more digital integration than they realize. In addition, the financial losses that can occur from just one single cyber breach can be enough to significantly damage an organization’s stability. Cyber liability coverage provides crucial risk management and protection against financial losses. While businesses of all sizes, in all industries, should incorporate cyber liability into their insurance program, certain industries especially require this coverage.
Why are Cyber Risks Increasing So Significantly?
There are many reasons why cyber threats have become more prevalent in the past decade. The core reason is the technological advancements that have come into the business landscape and the heavier reliance on such technologies. Before the digital boom, while some operations did rely on digital tools, there were more manual aspects and less access to personal information. Today, just about every company stores significant data in their databases and uses online tools for regular communication. This creates a perfect setup for hackers to infiltrate systems and gain access to this private information.
In addition, as technology advances, so do hacking techniques and tools. The introduction of AI and more intensive education around digital communication has provided more knowledge for cybercriminals to be better equipped at breaking through security measures. Due to these advances, everything from email, to client databases, to operation technology is at risk of being hacked.
What is the Financial Impact of a Cyber Breach?
Cyber breaches can implicate many key players at once, and require extensive legal support to remedy. Currently, the global average cost of a cyber breach is at an all-time high of $4.35 M. In the US, the average cost is $9M. Cybercrime is predicted to cost a total of $10 trillion by 2025, making it one of the most expensive risks businesses face today. With only half of the businesses enrolled in a cyber liability coverage program, that leaves many still at risk of falling victim to these schemes.
What Businesses Need Cyber Insurance?
Every business, both small and large, should have some level of cyber security in place to ensure they are protected in the event of a breach. Not only does cyber insurance help cover the financial losses associated with the breach itself, but it will also assist with legal fees, costs to notify affected parties, and business interruption. While every industry faces its own set of risks with regard to cyber hacking, the following are the industries that are most likely to be impacted.
Healthcare
The foundation of the healthcare industry’s operations is the storing of private and personally identifiable information. From names and addresses to banking information and insurance identification. In addition, hackers tend to target organizations that will pay a ransom. Since the healthcare industry is time sensitive and will need to get operations running quickly as possible after an interruption, these organizations are more likely to pay. The data they store can be used to commit fraud, making them an ideal target for cybercriminals. It is crucial for all organizations within the healthcare industry to purchase a robust and comprehensive cybersecurity plan, and improve their security measures to the highest degree possible.
Education
Similarly to healthcare, education institutions store vasts amount of private data, loan information, banking information, and student records. There has been a significant uptick in ransomware attacks on educational institutions, with threats of stealing information about students, parents, and teachers. Not only should organizations improve their technology and security measures, but also incorporate cyber insurance to mitigate an attack that could implicate thousands of individuals.
Government Institutions
Government agencies are some of the most common targets for cybercriminals. They store vast amounts of private information, including social security numbers, bank accounts, names, addresses, and personal history information. Since this information is so valuable to hackers, attacks tend to be complex and sophisticated, making the financial implications even greater. Every government agency, including third-party contractors, should have a comprehensive cyber security policy in place.
Financial Institutions
Financial institutions have always been at risk of cyber attacks. They store extremely valuable banking information, which is ideal for hackers looking to commit fraud. Banks, credit companies, and digital banking software organizations all face daily threats of hacking as operations have become predominantly digital. Financial institutions have had some of the largest cyber breaches ever recorded, with the largest impacting more than 885 million individuals. Due to the severity of losses financial institutions face, cyber insurance should be a mandatory part of their risk management plan.
What Other Industries Are at Risk of Cyber Breach?
Aside from the core 4 industries that tend to experience the greatest number of cyber attacks, many other industries experience threats on a regular basis. Retail, manufacturing, tech, and auto industries also face their own array of threats and need to proactively put in place measures that can help offset the aftermath of a breach. In today’s world, the industry or the size of the business no longer matters. If there are any digital aspects to your organization's operations, and if any sensitive data is stored within your own servers or external, cyber liability coverage is an absolute must.
Cyber Insurance with ECBM
ECBM is dedicated to providing the best possible coverage at the best price for our clients. Our team has the experience and expertise in cyber liability coverage to build a policy that will protect your organization from its unique set of risks. If your business is in need of policy review or cyber coverage, we’re here to help. Contact us for more information on our services.
