Insurance is essential for individuals, families, and businesses to go through life without fear of having to spend a significant amount of money to recover lost items. Travel insurance, car insurance, and home insurance have all been widely used for decades. But now, thanks to evolving technology and skillful digital criminals, cyber insurance is becoming just as important.
According to the Insurance Research Council, only one out of every seven drivers is currently uninsured in the United States. House insurance warranties are just as essential for any property owner and the best companies provide 10 years of quality coverage on qualified structural defects. Also, travel insurance is a must-have for frequent travelers to avoid financial distress.
All of that insurance is important, but they don’t cover valuable digital information. Cyber insurance does and is becoming more and more popular across the U.S. and the globe.
“As brokers become more experienced with cyber exposures, they are growing their knowledge of this new breed of risk,” said Ken A. Crerar, president and CEO of The Council of Insurance Agents and Brokers. “This is a good sign, as brokers play an increasingly crucial role in both cyber risk mitigation and post-event response.”
According to the Insurance Journal, businesses are purchasing more cyber insurance policies due to the increase in cyber hacks and attacks over the last few years. In addition, as The Council of Insurance Agents and Brokers’ latest survey states, the price for this type of coverage is finally stabilizing.
The survey took a look of roughly 100 commercial lines brokers and found that 32% of respondents’ clients bought some type of cyber insurance and/or data breach coverage over the last six months, which is a 3% increase from 2016.
When brokers were asked why their clients bought cyber insurance, they cited risk of transfer as the number one reason for larger corporations (63%) and small to medium-sized companies (36%). For smaller organizations, the risk of contract breaches was prioritized as well. For a breach of contract claim, in any situation, the plaintiff must prove at least four things: the forming of a contract, the performance of the contract, the defendant’s breach, and any damages occurred as a result of the breach.
“Brokers are actively advising clients on the preventative steps to take now to increase the chance of escaping the virus, which has infected hundreds of thousands of system,” added Crerar.
