What is Cyber Insurance?
We’ve heard of Cyber Crime, and how it affects an individual and many businesses too by causing huge losses. But is there also a Cyber Insurance to protect us against activities that cause such a loss for a business?
There is Cyber Insurance! Cyber Insurance provides a customer coverage provided by the insurers’ ‘cyber-insurance’ policies which can include coverage against losses such as data destruction, extortion, data theft, hacking instances, and even denial of service attacks. Some insurers also cover companies for losses caused to others which can be by errors or omissions of certain data, failure to safeguard valuable data, defamation, etc. This also covers other added benefits including regular security-audit, post-incident public relations and investigative expenses, and criminal reward funds. Cyber Insurance policies tend to cover a business’ liability for a data breach in which the firm’s customers’ personal information such as Social Security or Credit Card details, is exposed or stolen by a hacker or other criminal who has gained access to the firm’s electronic network. This covers a variety of expenses for companies associated with data breaches, including notification costs, credit monitoring, costs to defend claims by regulators, other fines, and penalties, and loss resulting from identity theft.
When Was Cyber Insurance Introduced?
The term Cyber Insurance came to light during the 90’s when internet related technologies began to appear. During the early days of a growing technology company, it was necessary to transfer some of the risk associated with it. These policies were initially written to protect unnecessary exposure of a company’s media and content. Later during the early 2000’s as internet-based interactions became more common, more policies were introduced, and cyber insurance providers even began to cover risks associated with Cyber Business Interruption, Cyber Extortion, and Network Asset Damage.
Where Can One Buy Cyber Insurance?
These days there are a lot of insurance providers that have begun covering risks related due to the internet or web-based crimes, which can either be for an individual, for example in case of an identity theft, or for a business that cover instances like data breaches, etc. Some of the providers that provide Cyber Insurance and cover Risks are AIG, ABA Insurance, BCS; which offers cyber and privacy loss protection plans through Blue Cross and Blue Shield, CNS insurance, Liberty Mutual, and several others. XL Group, for example, is one of the providers who covers privacy and security liability, data breach response and crisis management, business interruption expenses, data recovery costs, cyber extortion, and any fines and penalties from a legal or regulatory action.
What Can We Expect In The Future?
Cyber technology is omnipresent, and Insurance providers seem to be growing in numbers. The Cyber Insurance market is forecast to grow by 200%, and about $10 billion plus in premiums by the year 2020 with. This includes large corporations and even SME’s that provide insurance coverage for companies. We can surely expect a lot of insurers including Cyber Risk coverage within their traditional offerings or developing completely new policies for covering Cyber or Internet-related threats.