As businesses rely more heavily on technology to streamline operations and connect with customers, the potential risks of cyber threats and data breaches loom larger than ever.
In response, cyber insurance providers have stepped up to aid businesses seeking to safeguard their digital assets and mitigate damages caused by cyber security incidents.
Cyber attacks have been a news mainstay in recent months, with Suncor Energy one of many Canadian organizations that have been impacted by such attacks.
Nova Scotia officials recently announced that up to 100,000 people in the province had their data compromised in a breach targeting a file transfer service used by several government agencies.
With cyber attacks occurring more frequently, Gowling WLG partner Brent Arnold said cyber insurance providers have become more selective about who they sell coverage to.
“We may be moving toward a time when the courts and privacy regulators will treat having cyber insurance as a table stakes part of cyber risk management, like having an incident response plan and technical safeguards,” said Arnold, whose practice area includes cyber security and data protection law. “That will put some organizations in a difficult position because coverage is getting more expensive and harder to obtain.”
Specialist brokers who participated in a survey by Insurance Business Canada echoed these observations and provided valuable insight into the growing needs of organizations seeking cyber insurance coverage.
Notable suggestions included crafting specialized offerings for budget-constrained entities like municipalities and schools, integrating insurer-provided cyber security solutions and advisory services into coverage, and enhancing coverage for emerging threats such as social media-driven scandals involving bots and deep-fake videos.
The brokers also emphasized the need for higher cyber crime coverage options to address the unique vulnerabilities faced by investment advisors, small nonprofits, and small businesses.
Learn more about brokers’ insights on the cyber insurance space by reading Insurance Business Canada’s 5-Star Cyber 2023 report.
