Data is one of the most important currencies for today’s businesses — it allows us to find new customers, expand our offerings, and better meet employees’ benefits needs.
Understanding the quantitative side of industry trends can be a powerful first step for creating data-driven solutions.
Yet despite its benefits, data is what makes businesses more vulnerable to attackers than ever before. Today’s businesses face more threats to their privileged information than they may have the resources to handle. After all, it has historically been much easier to look out for a bad actor slipping their hands into a confidential file cabinet than it has been to track malicious moves in the vast digital landscape.
Enter: cyber insurance. It’s the last line of defense that your business has to protect itself from cyber attacks — but it has been one of the most important for our business; it is something that allows us to protect our customers, transfer risk, and bring a level of comfort to our business partners that in the event that there is a major event we will have the resources and support to work through the resolution.
What is cyber insurance?
It’s limiting to define cyber insurance with one broad stroke. It has different applications depending on the type of business, industry, or scale. On the whole, cyber insurance helps businesses mitigate their risk in the case of a cyber-related incident. With cyber insurance coverage, the cost of claims from data recovery services, regulatory penalties, impacted party notifications, credit monitoring services, errors and omissions, and others are offset by the policy.
If there’s one thing we hear time and time again in our business, it’s that HR professionals are increasingly demanding Software-as-a-Service (SaaS) tools to streamline their work, from managing employee data to administering benefits. Across the board, the growth of SaaS has been phenomenal: its market share grew from $145.3B in 2017 to a predicted $206.2B in 2019.
As businesses increasingly look to these platforms to store valuable data, the need for a product like cyber insurance has continued to increase. PricewaterhouseCoopers reports that the total value of premiums is forecasted to reach $7.5B by 2020, after having only been available in the market since 2005. According to PwC, about one-third of U.S. companies currently purchase cyber insurance in some form.
Why is cyber insurance important?
Cyber insurance protects not only your business’s data, but the data of your employees and customers. Investing in a policy makes good business sense. Most customers new to your company will want to know what type of data protection is governing your relationship.
When it comes to the bottom line, cyber insurance may be a life saver in the case of a breach. Depending on your policy, it can cover the cost of communicating with impacted parties, restoring identities in the case of theft, recovering data, repairing damaged computer systems, litigation, and even extortion. With the average cost of a cyber attack coming in at $1.67M, you’ll thank yourself for the investment.
Why does cyber insurance matter for the future?
No business can predict the future, but smart businesses will prepare for it. We encourage viewing cyber insurance not merely as a protective measure, but as an investment that increases the value your business offers. If your business is responding to an RFP for any company that handles data, for example, they will want to see that you have insurance to keep them safe. Even if the RFP doesn’t ask for this (although we believe it should), you’ll get bonus points for adding it.
The ability to handle a cyber-related crisis with integrity and honesty is a powerful tool in today’s competitive business environment. Cyber insurance will enable your business to respond promptly and actively, in the interest of both your customers and employees.
Don’t be the next headline. Check out our full guide on cybersecurity below.