Who Needs Cyber Liability Insurance?
Did you know that 1 in 4 businesses in Canada were targeted with cyber attacks in 2020?
Cyber crime is on the rise and it’s more important than ever to ensure you are protected. More than 60,000 businesses fell victim to cyber fraud in Canada last year, and many of those affected were small to medium-sized businesses. These types of businesses are being targeted with increasing regularity.
The COVID-19 pandemic has led many businesses to digitize, move assets online, and shift to remote work solutions. While this change has been a positive change for many, it has also caused businesses to become increasingly at-risk from cyber attacks.
If you want your business to be fully secure, it is important to understand your risk profile and put a business insurance plan, with cyber liability, in place to ensure that you’re properly protected. Less than a third of businesses have response plans in place to deal with cybersecurity breaches — and you need to make sure you’re not one of them.
The Increasing Importance of Cyber Insurance
The insurance industry has seen a rise in the cost of cyber liability insurance over the past few years. In the past year, there has been a 28% rate increase in cyber coverage, as a result of high claims, payouts, and demand for the product.
This is driven, in part, by the recent trend towards higher ransomware demands — and that’s why it’s important to put a plan in place for your business as soon as possible. Our cyber insurance provider had this to say about this concerning issue:
“The reason for the rise in the cost of cyber insurance is that we have seen a serious increase in a number of high severity ransomware claims. In 2017, we were looking at ransomware demands of $300 and expected the total to fall below $10,000. Last year, the average demand was up to over $1M, and we have seen a number of demands reaching $20M.
To put this in context, our team handled 10 fewer ransomware claims this quarter than in the same period last year, and yet the cost to settle them this year has been 500% higher. That’s what’s driving the difference.”
Businesses with Exposure to Risk
While most businesses can benefit from cyber liability insurance, there are certain businesses with higher exposure to risk than others. If your business falls into one of the following categories, you should definitely consider cyber liability protection:
Large Team (20+)
Businesses with 20 or more employees are especially vulnerable to cyber attacks, due to the high number of passwords and logins for online systems. If any single account or login is compromised, the entire network could be at risk.
If you gather and store sensitive personal or corporate information, particularly financial information, a data breach could be very costly for your business. It is especially important in these scenarios to ensure that your business is fully insured.
Online Applications or Sales
If your business accepts online applications or sales (e.g. through an eCommerce website), then you will be vulnerable to cyber attacks through these systems. Make sure that your systems are secure and you have a contingency plan if they go down.
Many businesses have shifted to allow more remote work within their teams. If your employees are using personal devices to work and access company resources, the same security protection may not be in place for them. Any compromised device could impact the entire network.
If you work extensively with third-party vendors, independent contractors, or other service providers, all of these points of contact may be potential risks. Phishing emails can be disguised to come from a familiar source and anyone can be an indirect threat to your network security.
Businesses in At-Risk Industries
In addition to the common forms of cybersecurity risk exposure, there are certain industries that have been identified as increasingly at-risk of cyber attacks. If you work in one of these industries, you should consider acquiring proper cyber liability insurance for your business:
- Administration management
- Business services
- Entreprise management
- Wholesale trade
Interested in learning about cyber liability insurance for your business? Contact the team at Jeffery & Spence today.