Cyber security: How much does it cost?
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As the frequency of cyber-attacks grows, they are bound to cause higher losses. The Ponemon Institute based in the US, claims that the average price for a small business to clean up after a hacking incident is USD 690,000, rising to over USD 1,000,000 for mid-size companies. The growth of interconnectedness is set to increase this figure further.
According to a survey conducted by Swiss Re and IBM®, 74% of respondents believe an incident due to digital interconnectedness could substantially harm their company. At the same time, 56% of respondents said that they did not have specific cover for such risks. The main reasons given were: the option hadn’t been explored, the companies were self-insured or they felt their exposure was not high enough.
Cyber insurance goes beyond merely putting in a claim for financial losses. An insurer can help your company formulate a crisis response plan, provide an IT forensic team to establish what went wrong, implement preemptive risk mitigation measures and more besides. If cyberspace suddenly strikes without warning, it is invaluable to have an experienced partner who can advise you on how to react as well as providing financial support.
The unpredictability and scale of cyber risks are pushing them to the forefront of things that can go wrong for businesses. Moreover, judging by the statistics from the Swiss Re/IBM® survey, there appears to be an imbalance between companies realising they are exposed and taking action to resolve the problem. It’s extremely important to keep the duration of this imbalance as short as possible. The cost of deciding you don’t need cyber cover, only to find out later than you really did need it after all is the real danger.
Or, to put it another way – you’re coming from the wrong angle if you are wondering whether your company can afford specific cyberinsurance cover. The real question is whether you can afford to be without it.
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