This year might be the time cyber liability insurance sees significant growth, especially following the recent WannaCry ransomware virus scare.
According to a report from Allied Market Research of Portland, the worldwide market for cyber insurance by the end of last year was about US$3 billion; the same report concluded that the market is expected to grow year-over-year by 28% and reach US$14 billion in gross premiums by 2022.
Cyber insurance may be relatively new, but it remains a product with potential that could see more demand in the near future, especially from vulnerable SMBs.
“Cybersecurity insurance is becoming a must-have for most businesses. There is simply no way for an organization to be completely protected from a breach,” said Rohit Sethi, a chief security officer for Toronto-based Security Compass.
“This is especially true for SMBs who rarely have security teams on staff and can scarcely afford many leading-edge security solutions. Insurance helps mitigate the financial impact to any company, but every business should treat it as an additional safeguard,” Sethi told
The Globe and Mail.
Another report by security firm Symantec found that in 2014, cyber attackers targeted small businesses 34% of the time – the study found that this was an 11% increase from just three years before.
Lisa Lifshitz, a partner at Toronto law firm Torkin Manes LLP, estimated that cyber criminals launch 3.5 new digital threats against small businesses each second.
“Twenty nine per cent of all small businesses have experienced a computer-based attack that affected their reputations, involved the theft of business information, resulted in the loss of customers or experienced network and data centre downtime,” she said in an interview with
Canadian Lawyer.
For a product that could soon shoot up in demand, cyber liability insurance remains a work-in-progress. Different insurers could assess the same cyberattack, but each could give varying degrees of risk.
“Every insurance company deals with coverage differently. There are always going to be carve-outs” warned Lifshitz.
Although cyber liability insurance is seemingly in constant flux as newer and more complicated cyber threats arise, securing a policy is still highly recommended for small businesses.
Lifshitz told
The Globe and Mail that small businesses that have not taken steps to become cyber insurance ready are not likely to get any coverage.
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